The FTSE 100 and European stocks finished mixed this Wednesday even after key measures of Chinese manufacturing showed a strong recovery as zero-Covid restrictions were lifted late last year.
Across the pond, US stocks wavered as key manufacturing data came in better-than-expected.
Treasury yields also rose on bets of more rate hikes by the Federal Reserve that offset optimism from strong China manufacturing data.
Read more: UK house prices slump to 11-year low
China's official manufacturing purchasing managers' index (PMI) stood at 52.6 last month against 50.1 in January – above the 50-point mark that separates growth from contraction. That marks the highest reading since April 2012, when it hit 53.5.
Market analyst Craig Erlam at OANDA said the latest Chinese PMI has "provided some cause for more optimism".
"It was already believed that the transition from zero-COVID to living with it was going smoothly but this survey data suggests businesses are now extremely optimistic about the future.
"That bodes well not just for China but regionally as well, as strong demand boost trade and a resurgence in tourism restores the battered industry. There's still a long way to go and there could be setbacks along the way but investors will no doubt be encouraged by these early signs."
Housebuilder Persimmon (PSN.L) plunged 11.39% after it said it expects to build and sell a lot fewer homes this year than it has in the past as the company's boss warned of an "uncertain" market.
Dettol and Lysol maker Reckitt Benckiser (RKT.L) was up 2.01% after it delivered a huge surge in sales after capitalising on a product recall from one of its largest rivals.
Burberry (BRBY.L) was up 1.26% given its close economic links with China.
Markets were also uplift as governor Andrew Bailey said the Bank of England has to monitor carefully how tightening works its way through to the economy.
Naeem Aslam, chief investment officer at Zaye Capital Markets, said: "Market players are a lot more optimistic as the governor of the Bank of England believes that the bank may take a break from hiking rates as things have started to flow in the direction that they desired.
"The fact that is this is good news from the Bank official who has been sending hawkish comments to the market which made many concerned."
Meanwhile, Brent crude (BZ=F) was down at around $84/barrel following an earlier rally.
Asian stocks jumped as strong China data revived reopening optimism. Tokyo’s Nikkei 225 (^N225) rose 0.26% to 27,516 points, while the Hang Seng (^HSI) in Hong Kong surged 4.21% to 20,619. The Shanghai Composite (000001.SS) also edged higher, rising 1% to 3,312 points.
Watch: Unrealistic to think Reopening Trade Won't Last: Ghosh