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Eurozone purchasing managers' indices bounced back in October, reassuring investors worried about a sharp deceleration in growth while highlighting a divergence between the region's two largest economies.

Markit's composite PMI rose to a 10-month high of 53.7 from 52.6, well above consensus expectations for a reading of 52.8, as the data company's PMIs for the eurozone's services and manufacturing sectors also rose more than expected.

The release followed strong PMIs from Germany earlier on Monday and mixed data from France . where the composite PMI declined as the services gauge slipped. The figures overall marked an improvement from the September data, when Germany had been hit by services sector weakness and a French manufacturing downturn continued. By contrast, in October the French PMI for the manufacturing sector recovered to a 10-month high of 51.3 from 49.7, above the neutral 50 reading analysts had predicted, while the German services index jumped well above expectations to 54.1 from 50.9.

In its report on Monday, Markit said Germany led the eurozone in October growth.

"The eurozone economy showed renewed signs of life at the start of the fourth quarter, enjoying its strongest expansion so far this year with the promise of more to come. With backlogs of work accumulating at the fastest rate for over five years, business activity growth and hiring look set to accelerate further as we head towards the end of the year," said IHS Markit chief business economist Chris Williamson.

He said the October figures point to a quarterly GDP growth rate of 0.4%, led by 0.5% in Germany, with the French economy expanding by 0.2% to 0.3%. But he said other indicators suggest France, whose economy contracted by 0.1% in the second quarter, may top that predicted growth rate.

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Capital Economics, however, called, the divergence between Germany and France in the PMI data "concerning."

"While the pick-up in the overall eurozone PMI will be welcomed by policymakers, the fact that it was driven by a sharp rise in Germany clearly highlights the divergence in growth between the eurozone's two largest member states," wrote Capital Economics' European economist Stephen Brown.

"Given that divergence, the ECB will still need to do more to bring inflation back towards its target on a sustained basis across the eurozone -- we expect the ECB to announce an extension of its asset purchase program at its next meeting in December,"

European stock indices were higher on Monday, with the Euro Stoxx 600 recently up 0.51% at 346.05. The euro was recently up 0.06% against the dollar at $1.0890.

The French statistics office will publish third-quarter GDP figures on Friday. These are expected show quarter-on-quarter growth of 0.3%.

Markit will report final October data for the  eurozone manufacturing sector on Nov. 2, with the services and composite indices following on Nov. 4.