Europe close: Stocks hold near multi-year highs after economic data

Europe's main equity indices continued to build on their most recent multi-year highs on Tuesday, buoyed by strong manufacturing and employment data in the single currency bloc.

At the closing bell, the benchmark Stoxx 600 was higher by 0.75% or 2.89 points to 389.53, alongside gains of 0.56% for the Dax to 12,507.90 and a rise of 0.70% in the Cac-40 to 5,304.15.

The week before the Cac-40 set a fresh five-year high on optimism after the first round of voting in France's presidential elections, while the Stoxx 600 was holding near its best level for nearly 20 months.

In parallel, euro/dollar was edging up by 0.08% to 1,0908 while front month Brent crude futures were down 0.76% to $51.13 a barrel on the ICE.

Positive sentiment was buoyed by strong purchasing managers' index data from the European manufacturing sector, offsetting soft prints from China, underwhelming reads from the US and frosty Brexit talks between Theresa May and her continental counterparts, said Mike van Dulken at Accendo Markets.

He said investors were keeping in mind Wednesday's US Federal Reserve policy update and Sunday's French election second round run-off.

The European manufacturing data showed the sector expanded at its fastest pace in six years in April, with IHS Markit's PMI coming in at 56.7, up from March's reading of 56.2 and just a tick below the flash estimate of 56.8.

This fuelled one of the largest increases in a sub-index of factory jobs in the 20-year history of Markit's survey.

"The latest survey readings indicate that manufacturing is growing at an annual rate of approximately 4-5%, which should make a significant contribution to overall economic growth," said Chris Williamson, chief economist at Markit.

"Companies are benefitting from the historically weak euro, improved growth in key export markets, rising domestic demand and ongoing central bank stimulus including record-low interest rates."

Later in the session, Eurostat published a report showing little movement in unemployment in March as the headline number remained at lowest its level in more than eight years.

A rate of 9.5% was the same rate as February but down from 10.2% in March 2016, which was above economists' expectations for a tick down to 9.4% but it nevertheless marked the lowest recorded rate in the euro bloc since April 2009.

Solid continental data helped offset disappointing news from China, as Caixin's manufacturing sector PMI fell from a reading of 51.2 for March to a seven-month low of 50.3 in April (consensus: 51.3).

Bayer climbed back from early losses after indicating it is seeking approval from US regulators in order to be able to complement dosage options for its stroke prevention pill Xarelto.

Italian eyewear group Luxottica dipped as it reported like-for-like sales down 3.5% in the first three months of the year as it moved to trim discounts and promotions.