Investors could be encouraged to place more money into European markets after it was revealed yesterday that France and Germany have emerged from recession with positive economic growth, according to asset managers. However, they warned that more sustained good news will be necessary to have a long-term impact.

Neil Dwane, chief investment officer for Europe at funds house RCM, said: "The market, in sentiment terms, needs better economic data, so this is good in sustaining the current market recovery. I still sense that many people have missed out on this rally, and signs that the world is healing should lead people to admit that they are too defensively positioned."