LONDON (AP) -- Financial markets edged higher Wednesday, recovering from a heavy sell-off the day before and as upbeat economic indicators from China offset the impact of dire ones from Europe.
A key survey of Chinese manufacturing activity, the so-called Purchasing Managers' Index, rose to 49.1 points in October, a three-month high. Though that still shows it the sector is contracting, it is a big improvement from September's level of 47.9.
Some investors fear the slowdown in the Chinese economy — which has been a pillar of global growth in recent years — would be sharp and difficult to handle. The latest indicators ease those concerns.
"The strong improvement adds to recent signs of stabilization of the Chinese economy, thus underpinning our view that the slowdown in activity is bottoming out," said Nikolaus Keis, analyst at UniCredit Research.
By the market close in Europe, Britain's FTSE 100 was up 0.1 percent at 5,804.78 while Germany's DAX rose 0.3 percent to 7,192 85. France's CAC-40 gained 0.6 percent to end at 3,426.49.
Wall Street mostly traded higher a day after suffering sharp losses. The Dow rose 0.1 percent to 13,112 while the S&P 500 was flat at 1,413.
Shares in Facebook surged 20 percent after the social network beat expectations for its earnings. Meanwhile, aircraft maker Boeing Co. raised its profit expectations for the year, driving its stock 1.1 percent higher.
The upbeat figures reassured investors somewhat after poor earnings reports the day before and more grim economic indicators from Europe.
Government debt in the 17-country eurozone rose to 90 percent of the bloc's economic output at the end of the second quarter, according to official data. That's the highest in the currency union's 13-year history and bodes ill for governments trying hard to reduce debt by means of tough tax hikes and spending cuts.
Meanwhile, the Purchasing Managers' Index for the economy of the 17-country eurozone, published by financial data company Markit, fell in October to its lowest level in over three years. A measure of German business confidence also fell.
"Surveys worryingly indicate that the eurozone downturn is, if anything, deepening rather than easing," said Howard Archer, chief European economist at IHS Global Insight.
The auto sector was also in focus after France's PSA Peugeot Citroen said the government was offering it a €7 billion ($9.1 billion) lifeline. In return, the Socialist government is expected to demand a reduction in layoffs as well as the suspension in dividend payments. Shares in Peugeot were down 4.6 percent.
Volkswagen AG saw its shares rise 3.7 percent after it reported a 58 percent increase in its third quarter net profit.
Earlier, in Asia, stocks showed some initial resilience but then faded.
Japan's Nikkei 225, after swinging between gains and losses, fell 0.7 percent to close at 8,954.30. Hong Kong's Hang Seng added 0.3 percent to 21,763.78. South Korea's Kospi lost 0.7 percent to 1,913.96.
Mainland Chinese shares were mixed. The Shanghai Composite Index rose 0.1 percent to 2,115.99 but the smaller Shenzhen Composite Index fell 0.4 percent to 866.45. Indian markets were closed for a holiday.
Benchmark oil for December delivery was down $1.26 to $85.41 per barrel in electronic trading on the New York Mercantile Exchange.
In currencies, the euro fell to $1.2944 from $1.2976 late Tuesday in New York.
Pamela Sampson in Bangkok contributed to this report.