- Eurozone manufacturing activity rises
- China's manufacturing eases
- US Fed meeting on the horizon
FTSE 100: 0.48%
CAC 40: 0.81%
FTSE MIB: 1.38%
IBEX 35: 1.53%
Stoxx 600: 0.65%
European equities gained as Eurozone manufacturing activity rose more than expected this month.
Markit's flash reading for the Eurozone purchasing managers' index (PMI) in December climbed to 52.7 from 51.6 in November. It beat the forecast for a reading of 51.9 and the 50 level that signals expansion.
"It's really encouraging to see the increase in the overall rate of growth. It's a reassuring signal that the recovery is still on track. We are not losing momentum," said Chris Williamson, Chief Economist at Markit.
"This is very much a manufacturing-led recovery. It's reflective of companies, especially in Germany, being more competitive and taking advantage of the upturn in global trade."
However, PMI services in the Eurozone dropped to 51 this month from 51.2 in November, missing economists' expectations of 51.5, as firms in the sector were forced to slash prices to gain business.
In China, the Markit/HSBC manufacturing PMI report was unveiled last night, falling to 50.5 in December from 50.8 in November, missing the 50.9 estimate.
Federal Reserve meeting looms
The Federal Reserve will hold its policy meeting on Wednesday when the US central bank may announce a scaling back of its monthly $85bn bond buying programme.
A slate of upbeat economic data has led some to believe the Fed will begin tapering this week.
Adding fuel to speculation was news last week that a bipartisan US budget was passed by the House of Representatives at a wide margin (332 to 94). The deal eases the fiscal uncertainty that has weighed on markets in recent months and is expected to sail through the Senate this week.
"With a decent string of data out of the US recently, notably from the labour market, and an easing of the fiscal situation due to the latest budget deal in Washington, the Fed have a bolder case to taper," said Ishaq Siddiqi, Market Strategist at ETX Capital.
Acting as a backdrop will be the release later today of US data on industrial and manufacturing production and US existing home sales.
Carrefour rallied after agreeing to buy a portfolio of 127 shopping malls in France, Spain and Italy from real estate group Klepierre for €2bn.
UBM fell after results from the publisher of InformationWeek suggested its 2014 margins forecast for its events unit is below estimates.
Aggreko was firmly higher after saying it expects full-year results to be slightly higher than previous expectations.
H&M gained after the European fashion retailer said revenue at stores and operations open at least a year rose 10% last month compared with a year ago.
ArcelorMittal slumped as Nomura Holdings cut its recommendation on the steelmaker to 'reduce' from 'buy', citing falling steel prices.
The euro was up 0.28% to $1.3780.
Brent crude increased $0.992 to $109.920 per barrel on the ICE.