World stock markets rose Friday after a jump in Chinese manufacturing activity suggested the global economic recovery will prove more resilient than feared and help Europe weather its debt crisis.
News that industrial production gathered pace in China in September eased fears of a sharp slowdown in the world's second-biggest economy. Corporate dealmaking, meanwhile, also suggested companies are increasingly confident in their outlook.
In Europe, Britain's FTSE 100 was up 1.1 percent at 5,609.91 while Germany's DAX was 0.8 percent higher at 6,277.41. France's CAC-40 was 0.8 percent higher at 3,744.47.
Asian markets closed higher and Wall Street was expected to rise on the open after chalking up its best September in 71 years. Both Dow and Standard & Poor's 500 futures were up 0.6 percent.
The upbeat figures from China helped Europe look past its own more disappointing figures. The purchasing managers' index, a gauge of business activity, for European manufacturing fell in September, suggesting growth in the sector is slowing. The unemployment rate for the 16-nation eurozone, meanwhile, remained above 10 percent in August, suggesting the labor market will be slow to benefit from any economic recovery.
Europe's difficult economic outlook was underscored this week after Ireland revealed it would be forced to invest another euro12 billion ($16 billion) into its crippled banking system and Spain's public debt rating was downgraded.
Investors took the news in stride, however, and in fact welcomed Ireland's move to detail the cost of its bank bailouts — and its promise not to default — as a helpful act of transparency. Despite the worrying headline news, borrowing costs for debt-laden countries like Ireland, Spain and Portugal actually fell.
Gains in markets in the U.S. and Asia helped cement investor optimism, as did a string of positive corporate news.
Shares in BP jumped 8.9 percent on Friday on the first day the company switched CEO — outgoing Tony Hayward was replaced by Bob Dudley, who sounded a positive note on the transformation forced on the company by the devastating Gulf of Mexico oil spill. He promised a leaner company and further assets sales.
In Spain, oil company Repsol saw its shares jump 6 percent after it announced that China Petrochemical would buy a stake in the Spanish company's Brazilian unit for $7.1 billion.
Economic indicators from the U.S. the previous day also helped sentiment. Chicago area manufacturing jumped in September, first-time claims for unemployment benefits fell more than expected last week, and second-quarter economic growth was revised slightly higher.
In Asia, Japan's benchmark Nikkei 225 stock average climbed 34.88, or 0.4 percent, to 9,404.23.
The index held firm after the government said Japan's jobless rate improved in August, falling to 5.1 percent from 5.2 percent in July and marking the second straight month of decline.
South Korea's Kospi added 0.2 percent to 1,876.73 while Australia's S&P/ASX 200 slipped 0.1 percent to 4,579.20.
Stocks markets in Hong Kong and China were closed for public holidays. Mainland Chinese markets will reopen on Oct. 8. Elsewhere, markets in Taiwan, India, Malaysia, Singapore and Indonesia all advanced.
Capital inflows into Asian stock markets jumped last month as investors sought to take advantage of the region's high economic growth rate.
Asian central banks will likely intervene in coming weeks to slow the rate of currency appreciation but a big push to weaken currencies outright is unlikely, Capital Economics said in a report. "We continue to expect that regional currencies and emerging Asia equity markets will eventually climb further."
In currencies, the dollar fell to 83.21 yen from 83.51 yen late Thursday in New York. The euro rose to new five-month highs of $1.3739 from $1.3623.
Benchmark oil for November delivery rose 39 cents to $82.70 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.11 to settle at $79.97 a barrel on Thursday.
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Associated Press writer Alex Kennedy in Singapore contributed to this report.
