Europe midday: Investors take in encouraging manufacturing data

European stocks were given a boost by positive manufacturing data from within the bloc as well as from China and Japan.

At midday, the benchmark Stoxx Europe 600 rose 0.98%, Germany’s DAX was 1% higher, France’s CAC 40 was up 1.16%, Italy's FTSE MIB increased 0.41% and Spain's IBEX 35 climbed 0.20%.

Meanwhile oil prices rose with West Texas Intermediate up 0.66% at $53.16 per barrel and Brent crude up 0.73% at $55.99.

Naeem Aslam chief market analyst at Think Markets UK said: “European markets are trading higher on the back of more upbeat economic data out of Europe and China. France and Spain have taken the crown among their peers when it comes to manufacturing PMI data which was released today. Germany which is usually the leader and considered as the economic engine of the Eurozone has disappointed traders a little.

“The second biggest economy in the world, China, which once was the biggest worry for investors, has started to show an improvement. The Chinese official purchasing manufacturing PMI index confirmed further expansion for the industrial sector during the month of January.”

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

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, 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 higher despite reporting a 28% drop in fourth-quarter net profit, while pharmaceutical giant Roche also 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.

Coming up, investors look towards US manufacturing PMI at 1445 GMT and Fed interest rate decision at 1900 GMT.