London - European shares climbed higher on Wednesday after slumping to a one-month low in the previous session, with a recovery in crude oil prices supporting beaten-down energy companies.
However, Volkswagen remained volatile after its recent slump on allegations of rigging emissions tests. It fell nearly 10 percent in early trading before rising 1.5 percent. It is still down 34 percent so far this week, with Deutsche Bank saying that the scandal is an “investor's nightmare”.
The market got some support from the energy sector as crude rose percent after falling sharply following a survey showing activity in China's factory sector shrank to its weakest level in 6-1/2 years. The European oil and gas index rose 1.3 percent.
“Somewhat surprisingly, the negative reaction to the disappointing Chinese data was very limited indicating that much of the bad news has already been priced in,” Markus Huber, senior analyst at Peregrine & Black, said.
“As the Volkswagen shock slowly fades, general positive economic fundamentals and supportive central bank stances should increasingly lend support to markets.”
The pan-European FTSEurofirst 300 index was up 0.5 percent at 1,373.17 points by 08h13 GMT, with analysts saying that investors were taking the advantage of recent share prices declines and finding value in some stocks.
Miners also gained 1.3 percent after falling to their lowest level since 2009 as prices of copper and nickel advanced.
Smiths Group rose 4 percent after the British engineering conglomerate confirmed the appointment of Andrew Reynolds Smith as its chief executive effective September 25.
On the downside, Coloplast fell 7.5 percent after the Danish health-care product maker said it will take a further provision of 3 billion Danish crowns ($448 million) to cover potential settlements and costs in relation to litigation in the United States..
The market showed little reaction to a survey showing euro zone business growth slowed this month as Asian demand weakened, leading to fewer new jobs and forcing factories to reduce output. The slowdown came amid debate on whether the European Central Bank should expand its stimulus programme to have more impact on inflation and growth.
REUTERS