European shares pared losses in afternoon trade on Wednesday to close higher, thanks to a strong open in the U.S. markets. However, airline shares suffered after a profit warning from Ryanair.
Europe's pan-European FTSEurofirst 300 index closed provisionally higher by 0.2 percent at 1,214.83 points.
There were encouraging final figures for gross domestic product (GDP) and purchasing managers' index (PMI) data in the euro zone. Second quarter GDP for the euro zone was revised up from -0.7 percent to -0.5 percent. Meanwhile, euro zone business activity in August was at its strongest level since June 2011, figures released on Wednesday showed.
One of the worst performers on the European market was budget airline Ryanair, whose shares fell 14 percent in morning trade but closed down 7 percent, after the company warned it could miss its full year profit forecast on the back of a decline in forward bookings. Rival budget airline Easyjet closed down 5 percent and German company Lufthansa traded down 2.9 percent.
Auto makers also traded lower after Moody's Investors Service said on Wednesday that it expected four of Europe's volume car manufacturers - Ford, General Motors, Fiat and Peugeot-Citroen - to lose a combined five billion euros ($6.6 billion) in the region this year as demand falls to its lowest level in two decades.
Shares of Vodafone were up 2 percent, a day after the company confirmed that it was selling its 45 percent stake in Verizon Wireless to Verizon Communications for $130 billion and that it would be returning 71 percent of the proceeds from the sale to shareholders in the form of cash and shares.
(Read more: Why $130 billion Verizon-Vodafone deal makes sense)