By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets rebounded in
afternoon action on Thursday, after data showed the U.S. economy
grew at a solid pace in the fourth quarter, offsetting worries
about Chinese manufacturing data pointing to a slowdown in the
sector.
The Stoxx Europe 600 index gained 0.3% to close at 323.32,
partly recovering from a 0.6% loss on Wednesday.
Among individual stocks, shares of Diageo PLC lost 4.7% after
the British drinks maker said demand had been volatile in emerging
markets in the first half of its fiscal year, with sales in the
Asia-Pacific region dropping 10%.
Hennes & Mauritz AB (HNNMY) gave up 3.6% after the Swedish
fashion retailer reported fourth-quarter profit that was below
analysts' expectations.
On a more upbeat note, shares of Givaudan SA jumped 6.3% after
the Swiss fragrance maker reported strong growth in the fourth
quarter.
Royal Dutch Shell PLC (RDSB) gained 1.1% after the U.K. oil
major said it would suspend a drilling project in the U.S. Arctic
and would look to improve returns. The company also reported a 71%
decline in fourth-quarter profit largely due to rising costs and
lower oil and gas volumes.
LM Ericsson Telefon AB climbed 3.5% after the telecom-equipment
firm said it swung back to a profit in the fourth quarter, helped
by a large patent-related payout from Samsung Electronics Co. .
The broader markets traded mainly in negative territory earlier
in the day, but started moving higher after a report showed the
U.S. economy expanded 3.2% in the fourth quarter last year.
The data came a day after the Federal Reserve said it would
reduce its asset-purchase program by another $10 billion to bring
it down to $65 billion a month, as expected. U.S. stocks, which had
dropped on Wednesday, were gaining Thursday, with the Dow
industrials up by triple digits.
China was also in the spotlight after the HSBC purchasing
managers index fell to a final reading of 49.5 in January, slightly
below a preliminary estimate of 49.6 and a signal the sector is
contracting. When the flash estimate came out last week, economists
hadn't expected the index to slip into contraction territory. The
surprise sparked a wider selloff in emerging-markets assets and
other perceived riskier papers, such as equities.
On the data front in Europe, a report from Spain showed the
country's economic recovery picked up pace in the fourth quarter,
with gross domestic product rising 0.3%. For the full year, the
Spanish economy contracted 1.2%. The IBEX 35 index added 0.7% to
9,964.50.
In Germany, labor-market figures showed unemployment fell by
28,000 in January, better than the 5,000 expected.
The DAX 30 index rose 0.4% to 9,373.48. France's CAC 40 index
picked up 0.6% to 4,180.02 and the U.K.'s FTSE 100 index eased 0.1%
to 6,538.45.
The London benchmark briefly jumped into positive territory in
midday trade after shares of HSBC Holdings PLC (HSBC) spiked 10%,
in what traders attributed to a "fat-finger" trade. HSBC shares
closed 0.6% higher.
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