European Stocks Strong on Chinese Data

        European stocks climbed Thursday as some strong Chinese manufacturing data eased concerns about growth in the world's second largest economy.
        But a surprise slowdown in French business activity helped keep a lid on early gains and briefly dented the euro.
        The Stoxx Europe 600 index was 0.3% higher in early trade. France's CAC-40 lagged behind, trading broadly flat, after manufacturing and services data fell short of expectations. Figures for the rest of the euro zone were due later Thursday.
        The broader gains echoed moves in Asia after HSBC's China preliminary manufacturing Purchasing Managers Index came in at 49.7 for May, beating expectations and a sharp increase from a final reading of 48.1 in April.
        In currency markets, the yen weakened modestly following the Chinese data, with the dollar trading 0.3% stronger at Y101.68. The Japanese currency typically rises when worries over growth leave risky assets out of favor.
        "The survey has helped ease investor concerns over slowing [Chinese] economic growth in the near-term," said Lee Hardman, a currency economist at Bank of Tokyo Misubishi UFJ.
        The euro slipped 0.2% against the dollar to $1.3656 following the French data.
        Markets were also boosted by an upbeat session on Wall Street Wednesday. The Dow Jones Industrial Average chalked up its biggest daily gain in more than a month as minutes from the Federal Reserve's latest policy meeting showed that officials discussed how they would eventually raise interest rates, but said their outlook hadn't changed enough to warrant a change in policy.
        In bond markets, Italian and Spanish debt was stable following some sharp swings in recent days. Yields in the euro zone's periphery have risen amid jitters ahead of European parliamentary elections, which begin Thursday.
        "The selloff in the previous few days has accompanied concerns over the rising support for extremists and anti-EU parties. We nevertheless don't expect any major policy shift in these elections," said analysts at Barclays.
        In commodities markets, gold was up 0.3% at $1,295.10 an ounce, and Brent crude oil was flat at $110.53 a barrel.
        Write to Tommy Stubbington at tommy.stubbington@wsj.com
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        (END) Dow Jones Newswires

        May 22, 2014 04:20 ET (08:20 GMT)