(MENAFN - AFP) Europe's main stock markets rebounded on Thursday as positive Chinese manufacturing data offset weak eurozone numbers, while the euro touched a two-year high against the dollar.
London's benchmark FTSE 100 index rose 0.63 percent to stand at 6,716.49 points in afternoon trading.
Frankfurt's DAX 30 climbed 0.66 percent to 8,978.86 points -- closing in on 9,000 for the first time ever -- and the CAC 40 in Paris edged up 0.07 percent to 4,263.78 points.
"Better-than-expected manufacturing data from China provided an excuse for investors to dive back into the equity markets in full throttle," said Spreadex trader Shavaz Dhalla.
The region's main stock markets had slid on Wednesday on profit-taking as traders looked nervously on plans by the European Central Bank to assess the balance sheets of eurozone banks.
Data published on Thursday by HSBC showed the bank's preliminary Chinese purchasing managers' index (PMI) for this month was 50.9, a significant improvement from September's 50.2 and the highest since 51.6 in March.
The index tracks manufacturing activity in China's factories and is a closely watched gauge of the health of the economy. A reading above 50 indicates growth, while anything below signals contraction.
By contrast, eurozone business activity slowed in October, coming off a 27-month high in September to highlight concerns the economy is recovering only slowly from recession, a separate survey showed.
The closely-watched PMI compiled by Markit Economics fell to 51.5 points in October from 52.2 in September.
Despite the poor data, "the euro is still looking impressive against the dollar and is being supported by a view that the US Federal Reserve is now not likely to taper (its stimulus) until 2014", added Currencies Direct dealer Phil McHugh.
The European single currency reached 1.3822 -- the highest point since November 2011. It later stood at 1.3787, which compared with 1.3776 late in New York on Wednesday.
The dollar stood at 97.44 yen, unchanged compared with Wednesday.
Sterling slid to 1.1703 euros and dropped to 1.6146
On the London Bullion Market, the price of gold firmed to 1,336.74 an ounce from 1,331.25 on Wednesday.
Also in stock market activity on Thursday, Madrid's IBEX 35 index gained 0.45 percent to 9,873 points after Spain announced a dip in its towering unemployment rate in the latest sign that the eurozone's fourth-largest economy is battling its way out of a long recession.
The jobless rate eased for the second straight quarter to a still high 25.98 percent in the third quarter of 2013, a report by the National Statistics Institute showed.
The news dovetailed with a Bank of Spain assessment the previous day that Spain had emerged from recession in the third quarter with timid 0.1-percent economic growth.
"There was a hat-trick of good news for Spain, with data today showing the unemployment rate fell, coupled with a surge in profit's at Banco Santander and yesterday's report from the central bank that it has finally emerged from a 2 year recession," noted CMC Markets trader Toby Morris.
"While these are hopefully the green shoots of a fuller recovery, we can't forget the base that we are working from, with the jobless rate still at an eye watering 26 percent."
US stocks opened somewhat higher Thursday as the earnings season continued in high gear with a mixed bag of reports from leading companies.
The Dow Jones Industrial Average advanced 0.32 percent to 15,462.58 points after five minutes of trade.
The broad-based S&P 500 added 0.15 percent to 1,749.01, while the tech-rich Nasdaq Composite Index rose 0.17 percent to 3,913.59.
Thursday's batch of quarterly earnings reports continued to paint a mixed picture of economic conditions. Automaker Ford and industrial and consumer product company 3M exceeded expectations, while United Continental and Dow Chemical fell short.