LONDON: Evidence of a gradual acceleration in eurozone growth put the region’s shares on course for their best week of the year on Friday and pushed the euro to a three-week high.

As well as the encouraging economic data, which helped take some of the sting out of Thursday’s disappointing US retail and unemployment figures, investors gave a cautious thumbs up to the latest changeover at the summit of Italian politics.

Stocks in Milan were Europe’s best performers by some distance, rising 1.1 per cent versus a 0.4pc higher pan-European FTSEuro first 300 index. In the debt market, Italian borrowing costs hovered near 8-year lows.

Italian centre-left leader Matteo Renzi forced party rival Enrico Letta to resign as prime minister on Thursday after criticising his government’s failure to pass major reforms.

That means the country faces its third administration in a year, but the hope is the youthful, sharp-talking Renzi can breathe new life into efforts to streamline the eurozone’s third largest economy.

“The appointment of Renzi is seen as something positive. He is a new politician who can take decisive action,” BNP Paribasrate strategist Patrick Jacq said.

“This is not political uncertainty. In fact, the political situation in Italy now is clearer.” In the currency market, the euro traded at just under $1.37, within touching distance of a three-week high hit earlier in Asia.

Eurozone growth and the positive sentiment towards Italy helped its cause, although a softening dollar on the back of Thursday’s lacklustre data had an equal effect.The mood was buoyed as fourth quarter economic growth in Germany and France marginally exceeded expectations and offered hope of a more robust 2014.

The eurozone-wide number is due at 1000 GMT and forecast to show quarterly growth of 0.2pc, though given the performance of the bloc’s top two economies, it may well exceed those bets.

“It (GDP data) will confirm there is a recovery in train in the eurozone which if you are an equity investor should at the margin bolster your confidence that the improvement is for real and sustainable,” said Macquarie Capital strategist Daniel McCormack.

Early futures prices pointed to subdued end to the week for Wall Street though it, like European shares and MSCI’s45-country world index, was on course for its best week since the end of December.

Data from both the US and China have been unconvincing recently but the wobbles have been offset by assurances from the Federal Reserve, European Central Bank and Bank of England that their supportive policies will remain in place if needed.

In Asian trading, share markets mostly rose to give MSCI’s broadest index of Asia-Pacific shares outside Japan its biggest weekly gain since September.

Japan’s Nikkei stock average underperformed its counterparts though, tumbling 1.5pc for its sixth straight weekly losses as the yen continued to make ground against the weaker dollar.

“Japanese stocks have trouble advancing as overseas investors have become reticent,” said Kenichi Hirano, a strategist at Tachibana Securities in Tokyo.—Reuters