3pm update: European markets have bounced back from earlier falls following the release of positive economic data from the US.
As at 3pm, the FTSE was up 0.4%, or 20 points, to 5540 as London's leading share index staged an afternoon recovery following better-than-expected US retail sales and manufacturing figures.
Just two hours ago, the index was down 1.4%, or 78 points, to 5,440.
The feel-good factor is echoed in Germany with the Dax - down nearly 2% at 1pm - now making gains of 0.1%. However, France's Cac 40 is still languishing in the red, down 1.2%.
The Dow Jones has opened trading in positive territory, up 0.05% to 1,2085 after a spate of positive economic figures helped allay ongoing eurozone concerns.
US retail sales grew by a better-than-expected 0.5% in October, while producer price inflation fell to 5.9% last month from 6.9% year on year in September and a key survey showed an increase in manufacturing activity.
Earlier, London's leading shares declined as sluggish euro growth figures failed to boost investor confidence despite Italy's progress towards forming a new government.
Financials led the plunge into the red, with Barclays and part-nationalised banks RBS and Lloyds all down around the 4% mark.
Earlier today, it was announced the rate of Consumer Prices Index (CPI) inflation in the UK fell slightly to 5% during October, down from a rate of 5.2% the month before.
London's woes were mirrored throughout Europe, with Germany's Dax down 1.9% and France's Cac 40 more than 5% off the pace as euro debt concerns weighed on investor sentiment.
European shares started trading in negative territory this morning - mirroring overnight losses in Asia and the US - on continued concerns about the eurozone debt crisis.
German Chancellor Angela Merkel said Europe faces its "hardest hour" since World War II.
The French economy grew by 0.4% in the third quarter, higher than the 0.3% forecast, the national statistics institute INSEE said. Meanwhile, German economic growth stood at 0.5% in Q3. The nation's Q2 growth was also revised up to 0.3% from an initial estimate of 0.1%.
On Monday, Merkel told her party congress that Europe is "perhaps in its hardest hour since the Second World War." as new governments in Rome and Athens discuss ways to ease the nations' debt burdens.
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