By Andrea Tryphonides Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--European stocks were mostly higher Thursday, boosted by a bounce back in the oil and financial sectors on improved sentiment and positive global cues.
By 0750 GMT, the Stoxx Europe 600 index had gained 0.3% to 249.21. London's FTSE 100 was up 0.2% at 5141.87, Frankfurt's DAX was flat at 6057.29 and Paris's CAC-40 had gained 0.3% to 3527.40.
In a note, Citigroup pointed out that U.K. and European equity markets are only about 5% below the levels at which they started the year, despite the recent selloff and downbeat investor mood. It added that fears of a double-dip are "overdone".
The Stoxx Europe 600 oil and gas sector index was up 1.5% at 292.36 and BP shares gained 5.2% to 384.35 pence as investors hoped that British politicians would convince U.S. President Barrack Obama to temper his rhetoric towards the company. The selloff, and fears of default, were also seen as overdone.
In addition, the insurance sector was boosted by an approach for Brit Insurance. Although a mid-cap stock, the return of interest in the sector was seen as very positive. Brit Insurance gained 21% to 879.50 pence.
However, mining stocks fell after the Australian prime minister downplayed a report that the government would be considering major changes to its super-profit tax on mining companies any time soon. In London, Antofagasta fell 1.6% to 858.0 pence and Rio Tinto lost 1.1% to 3225.0 pence.
Earlier in Asia Friday, stock markets were higher, with resource stocks in Australia buoyant on the speculation the government might water down its controversial tax on miners. But shares in China underperformed the region as a slew of leading data painted a mixed picture of Asia's second-biggest economy.
Official numbers showed China's inflation was speeding up while industrial output was moderating, posing a challenge for the People's Bank of China in terms of future policy.
The Shanghai Composite index rose 0.3%, lagging gains in other regional indexes. Japan's Nikkei Stock Average gained 1.7%, Australia's S&P/ASX 200 rose 1.5%, South Korea's Kospi Composite was up 1.4% and Hong Kong's Hang Seng index rose 1.2%.
On Thursday, U.S. stocks rallied broadly as economic data from the U.S. and China, along with comments from Europe, helped momentum.
All three major large-cap measures experienced their third-largest one-day gains of the year. The Dow Jones Industrial Average rose 2.8% to 10,172.53. The Nasdaq Composite added 2.8% to 2218.71 and the Standard & Poor's 500 index rose 3.0% to 1086.84.
In the European foreign exchanges Friday, the euro was slightly lower after rebounding sharply on Thursday. The single currency was trading at $1.2102 at 0815 GMT, down from $1.2125 late Thursday in New York. The dollar was trading at Y91.56, up from Y91.34.
Elsewhere, spot gold was at $1219.70 per troy ounce, up $3.15 from the New York close Thursday on some modest buying on dips. But Nymex July crude oil futures were down 58 cents at $74.90 per barrel, suffering from profit-taking. September bund futures were barely changed at 128.69.
The credit markets tightened after a strong day on Wall Street Thursday, with a tentative recovery in BP boosting sentiment, according to Markit. Sovereigns continued to tighten.
Looking ahead, there are plenty of economic data releases to offer direction Friday. U.K. industrial production and producer price index figures are due at 0830 GMT. Later, U.S. retail sales are due at 1230 GMT, followed by the University of Michigan confidence index at 1355 GMT and business inventories at 1400 GMT.
-By Andrea Tryphonides, Dow Jones Newswires; +44-20-7842-9281; andrea.tryphonides@dowjones.com
