CORRECTED-UPDATE 1-Upbeat German data lifts European shares; Puma, AstraZeneca weigh

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CORRECTED-UPDATE 1-Upbeat German data lifts European shares; Puma, AstraZeneca weigh
Credit: © Reuters.

(Corrects Reuters Instrument Code for technology stocks in paragraph 9)

* Germany's DAX leads gains as GDP grows more than expected

* AstraZeneca to deliver fewer-than-expected vaccines to EU

* Sportswear maker Puma drops as lockdowns affect sales

* UK banker Lloyds gains on resuming dividends

Feb 24 (Reuters) - European shares rose on Wednesday, supported by stronger-than-expected growth in Germany's economy, although concerns over a possible rise in inflation and lofty equity valuations kept gains in check.

The pan-European STOXX 600 .STOXX was up 0.5%, with Germany's DAX .GDAXI leading regional gains as data showed bullish exports and solid construction activity helped Europe's biggest economy to grow by a stronger-than-expected 0.3% in the fourth quarter. stocks .SXTP jumped 1.1% to hover near one-year highs on optimism around major countries lifting coronavirus-induced lockdowns, while construction .SXOP and retail .SXRP stocks rose 1.1% and 0.9%, respectively.

"The market has fallen recently due to lofty valuations, but investors are becoming more accepting of the fact that as European economies slowly reopen and earnings improve, the current equity valuations could be justified," said Chris Beauchamp, chief market analyst at IG Group.

The benchmark STOXX 600 has rebounded nearly 50% from its March 2020 lows, also led by historic stimulus measures, but it has still far underperformed a 75% jump in the U.S. S&P 500 .SPX .

U.S. Federal Reserve Chair Jerome Powell reiterated on Tuesday that interest rates will remain low despite indications of rising inflation, assuaging some fears of a sudden tapering in monetary stimulus. another stimulus package will certainly be welcomed by market participants, inflation fears are still present, despite those concerns being downplayed by officials," said Milan Cutkovic, market analyst at Axi.

"As more countries are planning the reopening of their economies, the focus could slowly shift back to value stocks."

So-called "value" stocks, including industrial goods makers .SXNP , outperformed growth-oriented technology stocks .SX8P for a third straight day on Wednesday.

London's export-heavy FTSE 100 .FTSE rose just 0.1%, lagging other European stock indexes, as the pound jumped to a three-year high against the dollar. .L

In company news, AstraZeneca AZN.L dropped 0.7% after it told the European Union that it expects to deliver less than half the COVID-19 vaccines it was contracted to supply in the second quarter. Lloyds Banking Group's LLOY.L gained 1.6% after outgoing Chief Executive António Horta-Osório set out fresh targets to expand the lender's insurance and wealth business and further cut costs. goods maker Reckitt Benckiser RB.L gained 0.6% after recording its strongest sales in its history, while German sportswear company Puma PUMG.DE dropped 2.9% after saying it expects a heavy impact on its results from pandemic lockdowns through the end of the second quarter.

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