Positive economic data helped European shares break a three-day run of losses on Wednesday, offsetting some unconvincing company earnings and scare brought about by emerging markets.
The January purchasing manager index (PMI) data helped settle European nerves before the European Central Bank's monthly meeting on Thursday.The pan-regional FTSEurofirst 300 was up 0.4 per cent after the data. Outperforming Italy, Spain and Portugal bolstered gains of 0.4, 0.3 and 0.2 per cent in London, Paris and Frankfurt.
Markit's euro zone Composite PMI, which gauges business activity across thousands of companies and is seen as a good guide to economic health, climbed to 52.9 in January from 52.1 the previous month. That was the highest final reading since June 2011.
It showed the recovery of the 18-member bloc is broad-based, Markit said, with Germany leading an upswing in peripheral members amid signs of a stabilization in number two economy France.
"The euro zone PMI was down slightly on the earlier flash reading but nevertheless signals a very encouraging start to the year.It was welcome news following not so good data from the world's biggest economies, the US and China, earlier this week.
However, that the mood remained brittle and it would only take a poor US payrolls report on Friday to set the bears running again. The ADP reading on private hiring is due later on Wednesday, and investors are likely to react badly to any disappointment.