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European stocks up on EU growth hopes

London - European stock markets ended Wednesday's session on an upbeat note, boosted by encouraging eurozone data and better-than-expected company earnings, though gains were capped by more disappointing Chinese data, analysts said.

London's FTSE 100 index of leading shares closed 0.35% higher to end at 6 620.43 points, while Frankfurt's DAX 30 added 0.78% to finish at 8 379.11 points and the CAC 40 in Paris jumped 1.01% to 3 962.75 points.

"The biggest news today is that Europe is finally showing signs of growth," said Kathleen Brooks, research director at Forex.com trading group.

"Perhaps the most interesting development in the eurozone is the pick-up in France. While it's good news that there are signs of stabilisation in Spain and even Italy of late, France has been the weakest link for some time."

Private business across the eurozone returned to growth in July for the first time in 18 months, a key survey indicated on Wednesday, possibly signalling an end to recession, analysts said.

The Markit Eurozone Composite Purchasing Managers Index logged 50.4 points, above the 50-mark signalling growth, and a bigger-than-expected rise, after posting 48.7 points in June.

In company activity, shares in EasyJet soared, ending 3.67% higher 1 385.00 pence after the British no-frills airline said revenues jumped in the group's third quarter on rising passenger numbers and fares.

Revenue climbed 10.5% to $1.753bn in the three months to the end of June compared with a year earlier, the airline said in a statement.

Passenger numbers grew 2.6% to 16.4m and seat capacity by 3.6%.

On Wall Street, better-than-expected results from blue-chips like Apple initially boosted sentiment, but strong US home data later revived talk of the Federal Reserve winding down its stimulus program, leading to a mixed session.

US sales of new homes raced higher in June to the fastest pace in five years, according to government data released Wednesday.

In noon trade, the Dow Jones Industrial Average dropped 0.08% and the broad-based S&P 500 shed 0.05%.

The tech-rich Nasdaq Composite Index, meanwhile, rose 0.47%.

Social media giant Facebook is scheduled to report earnings after market close.

Asian stock markets closed mixed as data showing that Chinese manufacturing activity shrank further in July added to mounting concerns about the world's second biggest economy.

Tokyo slipped 0.32 percent, Shanghai was down 0.52% and Hong Kong added 0.24%.

HSBC's preliminary Purchasing Managers' Index (PMI) of Chinese manufacturing activity fell to 47.7 in July -- an 11-month low -- from a final reading of 48.2 in June.

A figure above 50 points to growth while anything below shows a contraction.

"Weaker Chinese numbers ... were quickly pushed out of the way by eurozone PMIs that give the smallest hint that, just maybe, things aren't quite as bad," said IG sales trader Yusuf Heusen.

"Particularly heartening was a welcome return to form by the German economy, which saw its august manufacturing sector move back into expansion territory."

The euro rose to $1.3230 from $1.3224 in New York late on Tuesday and the dollar gained to ¥100.21 from ¥99.43.

On the London Bullion Market, the price of gold climbed to $1 335 an ounce from $1 333.50 on Tuesday.


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