- US and Chinese factory activity grows
- German and Eurozone jobs data beat forecasts
- Danske Bank sees further ECB easing
FTSE 100: 0.82%
CAC 40: 0.80%
FTSE MIB: 1.03%
IBEX 35: 1.19%
Stoxx 600: 0.61%
European stocks edged higher after a report showed growth in US and Chinese manufacturing activity.
The ISM's US manufacturing index rose to 53.7 from 53.2 in February, but came in slightly under the consensus forecast of 54. A reading above 50 signals expansion.
The data follows China's official manufacturing purchasing managers' index (PMI) which revealed an improvement in the sector in March. China's PMI gauge for manufacturing activity rose to 53 last month from 50.2 in February, in line with analysts' expectations.
In the Eurozone, a revised manufacturing PMI report came in at 53 in March, matching the initial estimate and the consensus forecast.
The UK's PMI dropped to 55.3 last month from 56.2 in February, surprising analysts who had expected a reading of 56.7.
German and Eurozone unemployment
The Eurozone's unemployment rate was 11.9% in February, unchanged from the prior month. Analysts had expected it to rise to 12%.
In Germany, the unemployment rate remained stable at 6.7% in March, after February's reading was revised down from 6.8%. Consensus had been looking for a jobless rate of 6.8%.
The number of jobless in Europe's biggest economy dropped by 12,000 in March, compared to the consensus forecast for a decline of 10,000. February's decrease was revised to 15,000 from the prior reading of a 14,000 fall.
The reports come ahead of Thursday's European Central Bank (ECB) policy meeting. The ECB has been under pressure to find ways to tackle high unemployment and falling inflation in the euro-area.
The International Monetary Fund has called on monetary stimulus measures to boost the recovery.
Analysts at Danske Bank say they see "the odds slightly in favour of further ECB easing this week" .
"The Governing Council has discussed more easing at the latest ECB meetings and we think the balance will tilt this time. Our main scenario is a small refi rate cut to 0.15%," they said.
"If the ECB once again abstains from easing, we expect Draghi to sound dovish, but there will initially be a small disappointment and rates will inch higher. The markets will at some point get enough of soft words and instead demand action," Danske Bank added.
UK insurers rally
Insurance stocks, such as Prudential, received a boost from news that UK Chancellor George Osborne called for an inquiry into a leak by the Financial Conduct Authority on a planned review into part of the insurance sector.
Aberdeen Asset Management increased after the money manager announced £1.2bn in new funds for March and more plans to cut costs.
ICAP advanced as the interbroker dealer forecast full-year profit in line with analysts' estimates, despite a decline in sales at the broking unit.
BHP Billiton jumped after saying that it is planning to simplify its operations to focus on iron ore, copper, coal and petroleum.
Alstom climbed after the French maker of trains and power-generation equipment agreed to sell an auxiliary components unit to Triton for about €730m.
Cap Gemini slumped after Bank of America Corp. cut the French tech firm to 'underperform' from 'neutral'.
Osram Licht declined after the lighting manufacturer said sales of traditional lamps are falling faster than anticipated.
Metso Oyj was higher after The Times reported Weir Group may be willing to pay as much as €30 a share for the Finnish company.
Babcock rose for a second day after the engineering firm was named preferred bidder for a 21-year contract to manage London Fire Brigade's vehicle fleet and Panmure Gordon & Co. raised its rating to 'buy' from 'hold'. The company yesterday announced it was also chosen as preferred bidder to manage UK nuclear sites.
The euro was up 0.27% to $1.3806.
Brent crude futures fell $0.842 to $106.8690 per barrel, according to the ICE.