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Europe closes higher on earnings and Chinese data

European market closes higher

European shares closed higher on Thursday thanks to strong corporate results and encouraging data from China, and despite other data showing that euro zone business growth had been hit by falling demand.

European Markets: FTSE, GDAXI, FCHI, IBEX

The provisionally closed higher by 0.4 percent, with leading gains after reported a jump in third quarter profit.

Shares of - the world's largest advertising firm by revenue - closed 1.6 percent higher after it reported a 5.0 percent climb in organic growth, beating forecasts. In addition, Swiss industrial group closed up 5.0 percent after it said profit rose in the third quarter by 10.0 percent.

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But indexes' gains were capped by some stocks posting heavy declines after reporting earnings. Credit Suisse shares closed down 2.8 percent after profit missed expectations and several analysts downgraded the stock. Plus, shares of Swedish telecom closed down 5.3 percent after operating profit came in below expectations and the firm said sales were under pressure.

(Read More: Credit Suisse revamps rate trading after income slide)

Data from the euro zone also weighed on stock markets. Markit's flash purchasing managers' index (PMI) for the region fell from 52.2 in September to 51.5 in October, worse than forecast in a Reuters poll. This indicated that growth in business activity unexpectedly slowed in October, raising questions about the strength of the region's economic recovery.

Individual French and German data also failed to meet market expectations.

(Read More: Euro zone businessgrowth hit by falling demand)

China manufacturing in focus

Meanwhile, HSBC's China flash PMI for October rose to 50.9, thanks to a strong rise in new orders. The figure was higher than the previous month's reading of 50.2 and is the latest piece of positive data to emerge from the world's second-largest economy, following last week's upbeat third quarter GDP data.

However, investors remained cautious on China, with concerns over tight liquidity in the mainland continuing to weigh on sentiment in Asia.

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