Europe close: Stocks start February higher

Investors in European equities cheered positive manufacturing data from within the bloc as well as from China and the US, resulting in a positive start to February for the main benchmarks.

By the closing bell, the benchmark Stoxx Europe 600 had risen 0.86%, Germany’s DAX was 1.08% higher, France’s CAC 40 was up 0.96%, Italy's FTSE MIB had gained 0.81% and Spain's IBEX 35 ticked up 0.17%.

Meanwhile, oil prices registered a modest advance, with West Texas Intermediate up 0.38% at $53.04 per barrel and Brent crude up 0.57% at $55.90.

"After a disappointing end to January European equity markets have enjoyed a welcome respite after a raft of economic data showed that the global manufacturing sector appeared to have performed fairly well last month. Some decent numbers from China, as well as Europe and the UK have helped generate an air of optimism in spite of the recent Trump inspired turmoil," wrote Michael Hewson, chief market analyst at CMC Markets UK.

Manufacturing activity in the Eurozone kicked off the new year by accelerating to a six-year high, according to data released on Wednesday.

IHS Markit’s final purchasing managers’ index printed at 55.2 in January, up from the 'flash' estimate of 55.1 and December’s reading of 54.9.

Earlier in the day, China's 'official' manufacturing PMI came in at 51.3, down a touch from 51.4 in December but beating expectations for a reading of 51.2.

On the corporate side, Spain’s BBVA edged lower after reporting a 28% drop in fourth-quarter net profit, while pharmaceutical giant Roche advanced after posting a jump in 2016 profit on the back of strong sales.

Volvo rallied as it reported better-than-expected quarterly core earnings, while Swiss bank Julius Baer made gains as its net profit beat estimates.

Siemens also put in a solid performance after lifting its profit guidance for the fiscal year.

Volkswagen was in the green as it agreed to pay at least $1.2bn in compensation to owners of around 80,000 3.0-liter diesel vehicles affected by its emissions sandal in the US.

The Nordic region’s largest lender Skandinaviska Enskilda Banken climbed as it raised its full-year dividend even as the as it reported a small drop in fourth-quarter net profit due to higher expenses from its ongoing reorganisation.

In London, TalkTalk was on the rise as it announced that chief executive Dido Harding was stepping down, and said revenue and earnings for the current financial year would be affected by re-contracting activity, but will be in line with previous guidance.

Aerospace and defence group Rolls-Royce was on the front foot as UBS lifted the stock to ‘buy’ from ‘neutral’.

Sweden’s Electrolux was under the cosh, however, despite releasing fourth-quarter results in line with expectations.

Wizz Air flew lower after the Central and Eastern Europe focused airline cut its underlying net profit guidance for the full year despite reporting a surge in third-quarter profit, on the back of lower fuel prices and severe weather conditions.

Dutch telecommunications company KPN was in the red as its recorded a 55% drop in net profit during the fourth quarter of 2016 mainly due to higher net finance expenses.