Corporate news, healthy data boost European bourses

European exchanges posted gains on Friday, powered by corporate news and positive US economic data.

The London FTSE 100 index added 0.51 percent to close at 6,260 points, while in Paris the CAC 40 rose 0.58 percent to reach 5,541.62. The Frankfurt Dax gained 0.55 percent to finish at 6,588.83.

The Euro Stoxx 50 index of leading eurozone shares rose 0.53 percent to 4,140.66.

On the currency market the euro was trading at US$1.3085.

US prices shot higher after a tame report on consumer inflation boosted hopes for lower interest rates next year and helped extend a market rally.

The Dow Jones Industrial Average, which logged a new all-time record closing high on Thursday, climbed another 0.54 percent to 12,472.52 at 1620 GMT.

The tech-heavy NASDAQ composite index advanced 0.49 percent to 2,465.77 a day after closing at its highest level since February 2001.

The Labor Department reported earlier that its consumer price index (CPI) was flat in November, including the "core" index excluding food and energy, despite expectations of a 0.2 percent increase in both figures.

"The CPI report shows inflation is moderating, allowing the Fed to think about eventually reducing or cutting rates sometime in the middle of next year," said Robert Pavlik, chief investment officer at Oaktree Asset Management.

In London, defense group BAE Systems surged 6.86 percent to £4.245 on news that British authorities had dropped an investigation that had been threatening a contract for the sale of Eurofighter jets to Saudi Arabia.

In Paris France Telecom gained 1.65 percent to close at 20.98 euros after confirming this year's financial targets.

France Telecom supplier Alcatel Lucent added 1.78 percent to reach 10.88 euros.

Aerospace EADS rose 1.41 percent to close at 24.37 euros on hopes that its Eurocopter unit will be able to add 100 helicopters to the more than 322 already on order by the US Defense Department.

In Frankfurt, travel and tourism operator TUO was among the rare losers, falling 2.25 percent to 15.63 euros after lowering its targets between now and 2008 and announcing plans to cut 3,600 jobs.

"The markets are in relatively good shape. We're seeing a little bit of a year-end rally," said Thomas Muehlberger, fund manager at Bayern Invest in Munich.

"Everyone is turning around his portfolio and a lot of people were thinking it would be better to have a little bit more exposure to equities. There's a lot of money looking for returns," he added.

Elsewhere were gains of 0.39 percent to a record 4,347.04 on the Bel 20 in Brussels, 0.23 percent to 8,796.4 on the Swiss Market Index, 0.24 percent to 495.11 on the AEX in Amsterdam, 0.25 percent to 14,387.6 on the Ibex-35 in Madrid and 0.77 percent to 41,419 on the SP/Mib in Milan.