RTTNews - The European markets rose for the second day on Friday after a report showed that U.S. July existing home sales jumped more than forecast and U.S. Federal Reserve Chairman Ben Bernanke said the world is beginning to emerge from recession.

The National Association of Realtors that U.S. existing home sales rose 7.2% to an annual rate of 5.24 million units in July from a 4.89 million-unit rate in June. Economists had been expecting a more modest increase to a 5.0 million-unit rate.

Speaking at a Kansas City Fed Conference in Wyoming, Bernanke said, After contracting sharply over the past year, economic activity appears to be leveling out, both in the United States and abroad, and the prospects for a return to growth in the near term appear good.

French private sector economy grew for the first time in fifteen months in August with manufacturing showing expansion, a report by Markit Economics said Friday. The purchasing managers' index for the manufacturing sector rose to a 15-month high of 50.2 in August, signaling expansion, from 48.1 in July. Economists had expected a reading of 49.

Crude for October delivery rose $1.81 to $74.72 a barrel on the New York Mercantile Exchange, by the time the European markets closed, following Bernanke's comments.

The FTSEurofirst 300 index of pan-European blue chips closed 2.3% higher at 966.87 points, while the narrower DJ Stoxx 50 index rose 2.27% to 2,387.63 points.

Around Europe, the U.K.'s FTSE 100 index rose 1.98% to 4,850.89, while France's CAC 40 index climbed 3.15% to 3,615.81 and Germany's DAX index surged up 2.86% to 5,462.74.

Heavily weighted oil stocks rallied after crude oil prices rose to a new year-high. BP, Europe's biggest oil company, rose 2.1%, while Royal/Dutch Shell, the second biggest, climbed 3.2% and Total, the third biggest, surged up 2.6%.

Economy sensitive banking stocks gained on Bernanke comments. HSBC, Europe's largest bank, rose 2.1%, while BNP Paribas, France's largest bank, climbed 6% and Deutsche Bank, Germany's biggest lender, surged up 3.4%.

E.ON, Europe's biggest utility, jumped 5.5% on news that Italgas, owned by Eni's unit Snam Rete Gas, was interested in the Italian gas distribution network of E.ON.

A.P. Moeller-Maersk, owner of the world's biggest container line, surged up 7.6% after the company's CEO Nils Andersen said the world economy is turning around, with global trade picking up.

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