European stocks rose while the euro fell in afternoon trading Tuesday as investors digested robust German and US economic data ahead of a rate-setting meeting of the US Federal Reserve.
Company focus was on the insurance sector as Prudential and Munich Re reported earnings.
In afternoon trade, London's benchmark FTSE 100 index of leading shares climbed 0.70 percent to 5,934.21 points.
In foreign exchange deals, the European single currency fell to $1.3065 from $1.3147 late in New York on Monday.
Stocks on Wall Street opened higher after the government released data showing US consumer spending accelerating in February.
In the first 10 minutes of trade, the Dow Jones Industrial Average rose 0.41 percent, the broad-based S&P 500 gained 0.55 percent, while the tech-heavy Nasdaq Composite added 0.69 percent.
Fresh data Tuesday showed US retail sales growing 1.1 percent in February from January, their highest increase in five months.
Sales growth was strong even with the key auto component stripped out, suggesting consumers were feeling more comfortable about spending amid the pickup in the job market.
Meanwhile, despite the positive signs in the economy, investors did not expect any change to the central bank's easy money stance as the Federal Reserve's March policy board meeting got under way Tuesday morning.
"The release of the German ZEW sentiment data has also given the markets a boost (by) beating the expectations by a long margin."
German investor confidence surged to the highest level for 21 months in March, amid growing optimism that Europe's top economy can shrug off the worst of the debt crisis, data showed on Tuesday.
The ZEW think tank's economic expectations index rose by 16.9 points in March to stand at plus 22.3 points, the highest level since June 2010, the organisation said in a statement.
In German company news, the share price of Munich Re rose 2.48 percent to 111.40 euros after the the world's leading reinsurer said it expects a three-fold increase in profits this year to about 2.5 billion euros ($3.3 billion) in a recovery from last year.
In 2011, Munich Re saw its bottom-line net profit slashed to just 702 million euros from 2.4 billion euros a year earlier as a result of a string of natural catastrophes and losses connected with the eurozone debt crisis.
In London, shares in British insurer Prudential gained 2.71 percent to 740 pence after the group announced that net profits rose four percent to £1.49 billion (1.77 billion euros, $2.33 billion) in 2011 on Asian growth and from the level a year earlier.
Asian stock markets meanwhile closed mostly higher on Tuesday, with traders unfazed by fresh easing measures from Japan's central bank.
The Bank of Japan on Tuesday decided to boost a loan programme by almost $25 billion to kickstart the domestic economy.
The fresh easing measures follow the rate-setting board's move last month to pump 10 trillion yen ($130 billion) more cash into the economy.
The bank also said it would hold interest rates at near zero.
Source: AFP Global Edition