- Eurozone PMI manufacturing grows, led by Germany
- US factory activity expands
- US jobless claims fall to five-year low
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European stocks ended Thursday on a higher note after the Eurozone's purchasing managers' index (PMI) for manufacturing and services showed expansion in the industries in August.
The Markit composite PMI for the Eurozone rose to 51.7 points from 50.5 in July, the fastest pace in two years.
Services jumped to 51 this month from 49.8 last month while manufacturing grew to 51 from 49.8.
A reading above 50 signals expansion.
Growth was led by German which rose 53.4 in August from 52.1 in July, driven by manufacturing expansion.
However, France's PMI contracted, falling to 47.9 from 49.1 due primarily to a slump in services.
"A big question mark still hangs over France's ability to return to sustained growth," said Chris Williamson, Chief Economist at Markit. "Although the French PMI is well above the lows seen earlier in the year."
Nevertheless, ETX Capital Market Strategist, Ishaq Siddiqi, pointed out that the Eurozone data should come as good news to the European Central Bank's (ECB) President Mario Draghi and its members.
"Big sigh of relief for Draghi and Co who now have an even greater excuse to hold back from adjusting monetary policies as growth appears to be on board," he said.
"ECB forecasted an improvement in the euro zone economy by the latter half of 2013 so today's figures are fulfilling policymakers' expectations in Frankfurt and Brussels. On top of that, calm in euro-area peripherals with little fresh noises on the political and fiscal front add to the current market optimism that worse of the crisis is over in the Eurozone."
US data signals further recovery
The number of US jobless claims in the month ended August 17th dropped to 330,500 a week on average, the least since November 2007, according to a Labor Department report.
Compared with a week earlier, claims rose by 13,000 to 336,000, in line with the median forecast of economists surveyed by Bloomberg.
The prior week's figure was revised up by 3,000 to 323,000, a five-year low.
Separately, Markit said US manufacturing activity hit a five-month high in August as hiring picked up and new orders increased at their fastest pace since January.
The manufacturing PMI grew to 53.9 from 53.7 in July.
Another report from The Conference Board, showed its Leading Economic Index (LEI) for the US rose 0.6% in July to 96.0 following no change in June, and a 0.3% increase in May. It beat economists' forecasts for a 0.5% increase.
The raft of upbeat data comes as the Federal Reserve weighs up whether to start scaling back its $85bn per month in bond purchases.
Minutes of the Federal Open Market Committee's meeting last month showed members were broadly comfortable with Chairman Ben Bernanke's plan to begin cutting stimulus this year as long as the economy continues to improve.
Several participants said tapering may be needed soon as the FOMC indicated that it expects economic growth will continue to improve in the second half.
Economists expect the Fed will begin trimming quantitative easing in September at the central bank's next policy meeting.
Shares in IMI gained after the engineering company reported an increase in first-half profit on bigger margins at its severe service business.
Wolseley jumped after UBS AG raised its recommendation on the world's largest distributor of plumbing and heating products to 'buy' from 'neutral', citing growth in the US.
Wienerberger AG slumped after UBS AG lowered its recommendation on the shares
to 'neutral' from 'buy'.
Royal Ahold advanced after the Dutch supermarket owner reported second-quarter underlying operating income that exceeded analysts' expectations.
Premier Oil declined after the energy explorer reported first-half net income which missed analysts' expectations.
Other asset classes mixed
The euro/dollar fell 0.07% to the 1.3346 dollar
Brent crude futures recovered from a morning slump, rising $0.055 to $109.870 per barrel on the ICE.