By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- After a lackluster start to the day,
European stock markets pitched higher on Thursday after the latest
health check on the eurozone showed the region is in better shape
than expected.
Data: A fresh round of purchasing managers' indexes helped lift
the trading mood, with the manufacturing PMI for the eurozone
unexpectedly climbing to a two-month high of 50.7 in October.
Analysts at HSBC had expected the component to drop below 50, which
would have signaled the first month of contraction since June 2013.
A level above 50 signals expansion.
PMI indexes for Germany also surprised to the upside. The
manufacturing sector moved back above the 50 level, while the
services reading climbed to a four-month high.
The picture was more downbeat in France, where a reading showed
factory activity dropped to a two-month low.
In Spain, there was good news on the labor market, the
third-quarter unemployment dropped to the lowest level since 2011
at 23.7%, down from 24.5% in the second quarter.
Consumer confidence in the eurozone improved to negative-11.1 in
October from negative-11.4 in September, beating analyst
expectations.
U.K. retail sales fell 0.3% in September.
Market reaction: The Stoxx Europe 600 index traded with a loss
of more than 1% early in the day, but moved higher after the German
and eurozone PMIs. The benchmark closed 0.7% higher at 328.26.
Germany's DAX 30 index climbed 1.2% to 9,047.31, while France's
CAC 40 index gained 1.3% to 4,157.68.
The euro (EURUSD) dropped after the French PMI data, but
recovered to trade at $1.2658, up from $1.2648 late Wednesday.
The U.K.'s FTSE 100 index added 0.3% to 6,419.15. It was weighed
by supermarket chain Tesco PLC , which slumped 6.6% after a weak
earnings report and on news its chairman was stepping down after an
internal review found a history of accounting errors.
The pound (GBPUSD) dropped to $1.6037 after the U.K. retail
sales data. The pound traded around $1.6050 late Wednesday.
(Read more about the day's big European stock moves:
http://www.marketwatch.com/story/tesco-slumps-novozymes-rallies-europes-big-stock-movers-2014-10-23.)
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