PMI surprises help European shares snap losing streak
* FTSEurofirst 300 up 0.9 percent
* Euro zone and China surveys point to improving growth
* Developed markets benefit from flows out of EM
* Ahold top riser after beating profit expectations
By Alistair Smout
LONDON, Aug 22 (Reuters) - European shares gained in early trade on Thursday, snapping a three session losing streak after manufacturing survey data suggested that growth was taking root in the euro zone.
Business activity across the euro zone picked up more quickly than expected, Markit surveys showed, led higher by growing demand for German exports.
The FTSEurofirst 300 was up 0.9 percent at 1,218.22 at 1020 GMT, set for its biggest gain since the beginning of August.
"If you want to understand whether there's a positive or a negative outlook for equities, then PMIs are quite a good measure. We've seen a gradual improvement in PMIs since last July, and now we're in growth territory," James Butterfill, global equity strategist at Coutts, said.
"Fund flow data supports the view that investors are putting more money into developed markets rather than emerging ones."
Better PMI data did not just apply to Europe, with flash PMI data out of China pointed to a stabilising growth picture and a manufacturing sector at a 4-month high, helping the mining sector to a 1.5 percent rise.
The PMIs helped the European market to shrug off weakness in Asian stocks, which fell after the U.S. Federal Reserve's minutes offered little clarity over the timetable for a slowdown of its stimulus programme, prompting strengthening in the dollar.
"With emerging markets getting hammered, that's been something that's helped keep up developed markets," Will Hedden, sales trader at IG said.
"If the Fed have given us nothing from these minutes, then we've got to assume that at the next meeting they're going to be a bit more candid about the plan, so there's a couple of weeks to prepare yourself and not make any rash decisions."
The FTSEurofirst 300 remains 3.1 percent off a five-year high hit in May, when fears over stimulus reduction first hit the market.
The market has been helped by a decent earnings season, however. Dutch retailer Ahold was the top FTSEurofirst 300 gainer, up 5 percent, after reporting higher-than-expected operating profit for the second quarter.
According to Thomson Reuters StarMine, 90 percent of companies on the STOXX Europe 600 have reported second-quarter results, of which 46 percent have missed expectations, while the rest have met or beaten. In the previous quarter, 48 percent companies missed forecasts.
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