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.
The PMIs 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.
It was a more downbeat picture in France, with PMIs showing
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.
U.K. retail sales fell in September, down 0.3%.
Market reaction: The Stoxx Europe 600 index traded with a more
than 1% loss early in the day, but moved higher after the German
and eurozone PMIs were released. The benchmark rose 0.2% to
326.70.
Germany's DAX 30 index climbed 0.6% to 8,993.44, while France's
CAC 40 index added 0.6% to 4,128.16.
The euro (EURUSD) dropped right after the French PMI data, but
recovered to trade at $1.2659, up from $1.2648 late Wednesday.
The U.K.'s FTSE 100 index lost 0.3% to 6,379.36. It was weighed
by supermarket chain Tesco PLC , which slumped 5.1% 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 $1.6015 after the U.K. retail
sales data. The pound traded around $1.6050 late Wednesday.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires