European Markets Rise as US Earnings Season Kicks in with Strong Alcoa Results

European markets rose in the opening minutes of trade as a strong start to the US earnings season and promising inflation data from China lifted investor sentiments.

The pan-European FTSEurofirst 300 index rose 0.4 percent to 1,169.7 points. The UK's FTSE 100 gained 0.6 percent in the first few hours and France's CAC-40 was up 7 percent.

Spain's IBEX and Italy's FTSE MIB added 0.7 percent each, and Germany's DAX was up 0.5 percent.

In the UK, the Royal Institution of Chartered Surveyors and the British Retail Consortium released their monthly reports, which showed promising data for the property and retail sector. Major European data due for release during the day include the UK industrial production and trade figures for February.

Meanwhile, concerns in the eurozone continue as credit rating agency Fitch downgraded Portugal to junk status. Earlier, the country's court rejected some of the austerity measures, prompting the leaders to ask for larger cuts in government spending. Italy is still without a prime minister after last month's election was deemed inconclusive.

Earlier in Asia, several resource-sector stocks got a boost from the US aluminium group Alcoa, viewed as a bellwether for the materials sector, after the S&P 500 company reported a nearly 60 percent jump in quarterly profits. The solid start to the US earnings season eased concerns about corporate results in the first three months of 2013.

Further, the positive Chinese inflation data improved investor sentiments on the back of speculation that China's monetary stimulus will stay in place to support its economic growth. Consumer price inflation rate eased to 2.1 percent year-on-year in March from February's 3.2 percent, according to figures released by China's National Bureau of Statistics.

Earlier, most Asian markets rallied taking cues from a solid start to the US earnings season and positive China inflation data, while the Nikkei remained stable on a fifth straight day on yen weakness.

The Nikkei was little changed at 13192.6 while closing, after crossing the 13,000 mark on Friday for the first time since August 2008.

South Korea's KOSPI has edged up 0.1 percent to 1920.7, while Australia's S&P/ASX 200 gained 1.5 percent to 4976.8.

Hong Kong's Hang Seng rose 1 percent to 21939.5 towards close. In China, the Shanghai Composite index gained 0.6 percent at 2223.8.

In Japan, the aggressive monetary policies initiated by the central bank drove the yen to new lows and the US dollar edged closer to the key 100-yen level, its highest since May 2009. There has been speculation that the BoJ measures to fight deflation will boost corporate profits.

Meanwhile, the South Korean market continued to suffer from the tensions in the peninsula and the weakness of the yen. Amid rising military tensions, North Korea suspended its sole remaining major project with the South on Monday, the Kaesong industrial park.