European stocks gain on U.S. PMI; DAX jumps 1.15%

Investing.com - European stock markets were mixed to sharply higher on Wednesday, as strong U.S. manufacturing data eased concerns over the outlook for the country’s economy amid sustained euro zone debt worries.

During European morning trade, the EURO STOXX 50 jumped 0.87%, France’s CAC 40 climbed 1.14%, while Germany’s DAX 30 surged 1.15%.

Market sentiment strengthened after the Institute for Supply Management said Tuesday that its index of manufacturing activity rose to 54.8 from 53.4 in March, defying expectations for a decline to 53.0.

The robust data offset concerns that the economic recovery in the U.S. is losing momentum in the wake of a string of recent disappointing data and dampened speculation over the possibility of a third round of easing by the Federal Reserve.

Meanwhile, investors eyed weekend elections in Greece and France and the European Central Bank’s policy meeting on Thursday.

Financial stocks led gains as shares in French lenders Societe Generale and BNP Paribas surged 3.08% and 1.45%, while Germany’s Deutsche Bank and Commerzbank climbed 1.40% and 1.90% respectively.

UBS, Switzerland’s biggest bank, also added to gains, advancing 2.43% after first-quarter profit fell 54% on a loss at the investment bank and an accounting charge related to the company’s own debt.

Meanwhile, car maker Peugeot climbed 2.32% although France’s car registrations fell 1.6% in April, according to sector group CCFA. Rival company Renault saw shares rise 0.68%.

In London, FTSE 100 fell 0.18%, after data on Tuesday showed the U.K. manufacturing purchasing managers' index dropped to 50.5 in April from a downwardly revised 51.9 in March, still above the neutral 50.0 mark that separates expansion from contraction.

BSkyB was among the session’s top gainers, surging 2.13%, a day after Rupert Murdoch, whose News Corporation owns 39% of BSkyB, was said to be “an unfit person to exercise the stewardship of a major international company,” by a committee of British parliamentarians on Tuesday.

Elsewhere, BAE Systems Plc, Europe’s largest defense company, edged up 0.07% after saying it sees a modest growth in underlying earnings per share in 2012 as trading in the first four months of the year met its expectations.

Financial stocks were mixed, with HSBC Holdings adding 0.36%, while the Royal Bank of Scotland, Barclays and Lloyds Banking saw shares retreat 1.42%, 1.04% and 0.76% respectively.

Late Tuesday, Lloyds Banking reported a GBP2 million net profit in the first quarter, as the group put aside extra cash to cover claims from customers wrongly sold payment-protection insurance and said it is preparing for a period of economic stagnation in the U.K.

In the energy sector, BP fell 0.34% as the oil giant was still affected by the announcement on Tuesday of a drop in first-quarter profit due to a decline in production following the 2010 oil spill.

In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to rise of 0.11%, S&P 500 futures signaled a 0.11% increase, while the Nasdaq 100 futures indicated a 0.08% gain.

Later in the day, the euro zone was to publish official data the unemployment rate, while Germany is to release government data on unemployment change.

The U.S. was to produce a report on ADP nonfarm payrolls, as well as government data on factory orders and crude oil stockpiles.