LONDON: European stock markets advanced on Tuesday, with leading French bank BNP Paribas gaining after agreeing to pay a huge fine and miners leading the way in London after well-received Chinese data.
Traders also reacted to eurozone official data showing the unemployment total within the bloc dipped by 28,000 in May to 11.6 percent, with continued signs of improvement in Portugal and Ireland.
Wall Street stocks barrelled higher in mid-morning trade following strong US auto sales for June and a mixed bag of other economic data.
London's benchmark FTSE 100 index ended up 0.87 percent at 6,802.92 while the CAC 40 in Paris rose 0.87 percent to 4,461.12 points compared to Monday's closing levels.
Frankfurt's DAX 30 gained 0.23 percent to 9,856.12 points.
The euro dipped to $1.3681 from $1.3692 by late morning in New York, having reached $1.3700 at 1400 GMT, its highest level for five and a half weeks.
In Paris, shares in leading French bank BNP Paribas closed up 3.60 percent to 51.33 euros, with investors expressing relief that a dispute with US judicial authorities was over.
BNP admitted having breached sanctions against Cuba, Iran and Sudan and agreed to pay a record fine of $8.9 billion (6.5 billion euros) to avoid a criminal court case.
"The CAC 40 is being pulled ahead largely by the good performance of BNP Paribas shares following the announcement of an agreement with US justice officials which really opens up horizons for investors and the company," said Saxo bank analyst Christopher Dembik.
Chinese data boosts miners:
Also within the banking sector, France's Societe Generale was up 2.77 percent to 39.32 euros and Britain's Barclays advanced 1.50 percent to 216.0 pence.
Miners meanwhile climbed after official data showed Chinese manufacturing activity expanded at its fastest pace this year in June, in a sign that Beijing's attempts to tackle slowing growth in the world's number two economy are gaining traction.
The official purchasing managers index (PMI) hit 51.0 last month, the National Bureau of Statistics said in a statement. The figure is up from 50.8 in May and the best since a similar reading of 51.0 in December.
The index tracks manufacturing activity in China's factories and workshops and is a closely watched indicator of the health of the economy. A reading above 50 indicates growth, while anything below points to contraction.
On Wall Street, the Dow Jones index was up 0.72 percent to 16,947.12 points and the tech-rich Nasdaq index had jumped 1.06 percent to 4,455.06 about 90 minutes into trade.
The broad-based S&P 500 had risen to an all-time high, up 0.59 percent to 1,971.87.
"The first day of the new quarter has seen US markets surge out of the starting blocks, with a new all-time high for the S&P 500 and more gains for the NASDAQ 100," said Chris Beauchamp, market analyst at IG traders.
"Manufacturing readings remained relatively buoyant, as the dismal performance of the first quarter was banished from memory."
In London trading, shares in miner Rio Tinto rose 3.02 percent to 3,202 pence, while peers Anglo American gained 3.99 percent to 1,487 pence and BHP Billiton climbed 2.91 percent to 1,944.5 pence.
"The best performers today have been the miners helped by the improvement in Chinese economic activity and rising commodity prices," said Michael Hewson, chief market analyst at CMC Markets UK.
Pound strikes new high:
In foreign exchange trading, the British pound reached another near six-year high at $1.7162 as the currency continued to benefit from expectations of interest rate hikes by the Bank of England before declining slightly to $1.7144. That was up from $1.7106 late in New York on Monday.
The euro fell to 79.80 British pence from 80.04 pence Monday but firmed to 138.88 yen from 138.74 late on Monday. The dollar also firmed to 101.51 from 101.32.
The Chinese yuan closed at 6.2013 to the dollar, a new high for nearly three months, from 6.2031 on Monday.
On the London Bullion Market, the price of gold jumped closed at $1,327.50 after having jumped to a 3.5-month high at $1,334.06 per ounce during trading. This was against $1,315.0 on Monday.
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