London shares shrugged off downbeat Chinese economic figures and the Volkswagen saga to move ahead on Wednesday.
The FTSE 100 Index advanced 42.1 points to 5977 while Germany's Dax climbed 68 points and France's CAC-40 lifted 17 points.
Data out of Beijing showed a sharp fall in China’s manufacturing sector, following Tuesday's announcement that the Asian Development Bank had dropped its growth forecast for China for this year from 7.2% to 6.8%.
Traders continued to mull over the potential impact on European equities and the automotive sector in particular of the emissions scandal engulfing Germany's Volkswagen.
Connor Campbell at spread-betting firm Spreadex said: "Deutsche Bank warned that the scale of the scandal can’t yet accurately be assessed; in other words, the €6.5bn VW has set aside could prove to be painfully insufficient."
But they appeared to take heart from upbeat eurozone manufacturing and services data, pointed to steady growth of the single currency area's economy at the end of the third quarter.
Howard Archer at IHS Global Insight said: "The composite manufacturing and services output index for the Eurozone eased back to 53.9 in September after rising to a 5-month high of 54.3 in August from 53.9 in July.
"This meant the composite output index averaged 54.0 in the third quarter, which was marginally above the second quarter average of 53.9 and was actually the best quarterly performance since the second quarter of 2011."
Back in London, Premier Oil (LON:PMO) spurted 7.3p to 70.9p as the oil & gas group reported production ahead of full year guidance.
Shares in north-west water supplier United Utilities gushed 12p to 888.5p on news of trading in line with hopes despite a £25mln compensation bill for disruption caused by a cryptosporidium outbreak in Lancashire.
Real Good Food (LON:RGD) soured a penny to 51p after it blamed commodity price falls for lower revenue.
Investors gave their stamp of approval to philatelic dealer Stanley Gibbons (LON:SGI) as it said it may miss first-half targets but was confident of meeting full-year expectations. Shares rose 8p to 162p.
MARKET PREVIEW
London was set for another tough morning as markets in Asia and the US fell heavily again overnight.
FTSE 100 will drop more than 50 points at the open according to financial spread bet firms and following the 173 point or near 3% drop to 5,936 Tuesday.
Miners bore the brunt or the decline due to concerns over China and they were also weak in the US, where the Dow Jones Industrial Average tumbled 180 points to 16,330.
The two other main indices, Nasdaq and the S&P 500, registered even larger proportionate falls.
Sparking the declines overnight was another set disappointing data out of China, where the Caixin manufacturing PMI hit 47, its lowest level since just after the financial crash of 2009.
Asian markets also reacted badly, with heavy falls in markets in Hong Kong, Tokyo and Shanghai.
Company news in Britain today will likely be overshadowed by the Chinese reaction, but not for water company United Utilities (LON:UU.).
It issues a trading update with the attention likely to be firmly centred on the cost of the recent cryptosporidium outbreak in Lancashire that has disrupted water supplies for weeks.
IN THE PAPERS
China’s latest economic concerns dominate the business headlines.
Panic swept through markets yesterday amid renewed fears that a slowdown in China could rock global growth, reports the Times.
Commodity prices collapsed as investors speculated that demand was drying up in the world’s second-largest economy.
The Telegraph gloomily reports analysts suggest another “crash” in global markets is possible as almost £44bn was wiped off Britain’s leading companies dragging the Footsie down to just 37 points shy of where it closed on 24 August.
Meanwhile the Volkswagen scandal continues to escalate with the Times suggesting hundreds of thousands of Volkswagen drivers in Britain face a mass recall of their vehicles after the scandal engulfing the carmaker spread around the world.
The German company admitted that 11 million of its cars worldwide were affected by a scam in which it deliberately cheated in testing of its diesel models for toxic emissions.
The Guardian focuses on Martin Winterkorn, the German carmaker’s chief executive, who apologised but remained in his job despite its shares slumping and government calls for a European commission inquiry,
Elsewhere, the Mail reports Sainsbury's has again outperformed its ‘Big Four’ supermarket rivals, industry data for the last three months showed today, while the march of German discounters Aldi and Lidl has continued.
Market research firm Kantar Worldpanel said Sainsbury's sales grew 0.9% in the 12 weeks to September 13, while sales at Tesco, Asda and William Morrison all fell.