LONDON (AP) -- Solid Chinese manufacturing figures shored up markets Thursday ahead of policy statements from Europe's top two central banks.
The advance also comes a day after a statement from the U.S. Federal Reserve eased concerns that it was preparing imminently to wind down a massive bond-buying program that has boosted stocks over the past few years.
The positive backdrop provided by the Fed was accentuated by news that China's official purchasing managers' index — a gauge of business sentiment — rose to 50.3 in July from June's 50.1. The increase was unexpected as the consensus in the markets was for a modest decline below 50, the threshold between expansion and contraction.
"Stock markets received a boost over night, after the official Chinese PMI showed the manufacturing sector growing in July, beating market expectations for a small contraction," said Craig Erlam, market analyst at Alpari.
In Europe, the FTSE 100 index of leading British shares was up 0.5 percent at 6,651 while Germany's DAX rose 1.2 percent at 8,378. The CAC-40 in France was 0.5 percent at 4,012.
Wall Street was poised for gains at the bell, with both Dow futures and the broader S&P 500 futures up 0.6 percent.
Stocks were supported by Wednesday's statement from the Fed, which wrapped up its two-day meeting without any change to its monetary policy that has supported the economy by keeping interest rates ultra-low. That, in turn, has encouraged lending and spending and also boosted stock markets as investors seek returns higher than those offered by bonds.
Most market participants interpreted the statement as moderately dovish as it acknowledged concerns over near-term U.S. economic growth. That view was evident in the currency markets where the dollar faltered in the aftermath of the statement. However, it was recovering against the euro, which was trading 0.4 percent lower at $1.3244.
Later, the focus will turn to the European Central Bank and the Bank of England. Both are expected to keep policy unchanged amid signs of improvements in both the eurozone and the British economies.
"Any suggestions that a more hawkish outlook will be seen will certainly have the potential to knock stocks from these toppy levels," said Andy McLevey, head of dealing at Interactive Investor.
Volatility could be evident as the session drags on ahead of Friday's U.S. nonfarm payrolls report for July. If they show employment levels in the U.S. picking up pace, then it may prompt the Fed to start reducing its monetary stimulus earlier. The Fed has said that it is looking at when it should start reducing the $85 billion of financial assets it has been buying each month.
On Wednesday, better-than-expected U.S. growth in the second quarter of 2013 gave a modest boost to investor morale. The world's No. 1 economy grew at an annualized rate of 1.7 percent, beating expectations of 1 percent for the period. Separately, a private survey from payroll company ADP showed that U.S. businesses created 200,000 jobs this month.
Earlier in Asia, Japan's Nikkei 225 index, which has zigzagged all week, gained 2.5 percent to close at 14,005.77 as the yen faced selling pressure to the likely benefit of the country's exporters — the dollar was 1 percent higher at 98.58 yen.
Elsewhere, Hong Kong's Hang Seng advanced 0.9 percent to 22,088.79. The Shanghai Composite Index rose 1.8 percent to 2,029.07. South Korea's Kospi added 0.4 percent to 1,920.74.