World stocks advance on Wednesday

Solid German economic growth figures 8211; Europe8217;s biggest economy expanded by a modestly higher than expected 0.2 percent in the first three months of the year 8211; also helped fuel the rally,particularly in Frankfurt,where the DAX closed up 145.78 points,or 2.4 percent,at 6,183.49.

The CAC-40 in France ended 40.67 points,or 1.1 percent,higher at 3,733.87.

On Wall Street,the Dow Jones industrial average was up 82.60 points,or 0.8 percent,at 10,830.86 around midday New York time while the broader Standard amp; Poor8217;s 500 index rose 8.35 points,or 0.7 percent,at 1,164.14.

Better than expected growth in Germany also helped relieve some of the pressure on the euro 8211; by late afternoon London time,the euro was flat at 1.2640,though it had traded nearly a cent higher earlier in the day.

However,the euro8217;s medium-term fortunes are likely to depend on the debt crisis that has already seen Greece bailed out by its partners in the eurozone and the International Monetary Fund,and forced European policymakers to unveil a euro750 billion financial support package for the single currency zone.

Further comfort was provided by the news that the EU called Wednesday for much closer economic coordination between member states to curb the acute debt crisis that has threatened to sink their shared currency.

And the news that Spain aims to cut its budget deficit by a further 1.5 percentage point to 6 percent of the country8217;s gross domestic product in 2012 has also helped calm jittery markets.

Spain8217;s Prime Minister Jose Luis Rodriguez Zapatero outlined a raft of measures including cuts in public sector pay.

8220;Today8217;s Spanish budget is a positive step towards a return to fiscal health in the eurozone,8221; said Jane Foley,research director at Forex.com.

Policymakers across the eurozone face a difficult balancing act over the coming months 8211; sustaining growth at a time when big budgetary cutbacks are being enacted.

Figures from Eurostat,the EU8217;s statistics office,did little to encourage hope that the eurozone economic recovery is gathering a head of steam 8211; the 0.2 percent quarterly increase across the 16-country bloc hid big disparities. Greece contracted another 0.8 percent even before the government has enacted the bulk of its austerity measures 8211; spending cuts and tax increases that will further weigh on growth in the short term.

8220;The main concern for the euro countries will be restoring confidence in their fiscal positions,while keeping the impact on economic growth to a minimum,8221; said Jorg Radeke,an economist at the Center for Economic and Business Research.

Britain8217;s financial markets were more interested in the new government following five days of uncertainty 8211; after bouncing back strongly on confirmation that the Conservative Party had tied up a deal with the Liberal Democrats,the pound was trading way down from earlier highs above 1.50 at 1.4842.

The FTSE 100 index of leading British shares closed up 49.24 points,or 0.9 percent,at 5,383.45.

8220;The political union of David Cameron and Nick Clegg has given markets some semblance of certainty to cling to,but as with any marriage the hard work starts now,8221; said Tim Hughes,head of sales trading at IG Index.

As the new government was taking shape,the Bank of England8217;s governor Mervyn King hinted that the British economy may need some further support 8211; possibly involving further asset purchases by the central bank 8211; over the months ahead for the recovery to become fully entrenched.

Speaking after the publication of the Bank8217;s quarterly economic projections,King warned that the downside risks to economic growth have increased in the wake of government debt crisis gripping Europe in particular 8211; and that8217;s even before the coalition government has outlined its first raft of spending cuts,expected in an emergency budget statement from the new finance minister George Osborne within 50 days.

Earlier in Asia,stock markets were mixed.

While Japan8217;s benchmark Nikkei 225 stock average shed 17.07 points,or 0.2 percent,to 10,394.03,Hong Kong8217;s Hang Seng index gained 0.3 percent to 20,212.49 and stocks in mainland China rose 0.3 percent.

There was little excitement in the oil markets,where benchmark crude for June delivery was trading 21 cents higher at 76.58 a barrel in electronic trading on the New York Mercantile Exchange.

The June contract fell 43 cents to settle at 76.37 on Tuesday.