Updated from 4:46 a.m. EST

LONDON -- Stocks and the euro rebounded Wednesday after positive manufacturing surveys from around the globe, particularly in China, and a better than expected Portuguese bond auction helped take investors' minds off Europe's government debt crisis for a brief while.

In Europe, the FTSE 100 index of leading British shares was up 68.11 points, or 1.2%, at 5,596.38 while Germany's DAX rose 106.03, or 1.6%, to 6,794.52. The CAC-40 in France was 27.10 points, or 0.8%, at 3,637.54.

Wall Street was poised for a solid opening too -- Dow futures were up 81 points, or 0.7%, at 11,077 while the broader Standard & Poor's 500 futures rose 10.6 points, or 0.9%, to 1,190.28.

Sentiment in the markets has been buoyant since figures showed China's manufacturing boom accelerated in November, sustaining hopes that the world's second largest economy is still continuing to grow strongly.

The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index -- a gauge of business activity -- rose to 55.2 last month from 54.7 in October. A competing index, the HSBC China Manufacturing PMI, also rose solidly.

"Chinese economic data has come in ahead of expectations so this may help cheer investors a little, underlining the fact there's still strength in this booming economy," said Ben Potter, research analyst at IG Markets.

Equivalent surveys for the eurozone and Britain also confirmed that the global manufacturing recovery remains on track.

There are hopes that the survey later from the Institute for Supply Management about the U.S.'s manufacturing sector will also be strong, in line with a raft of recent U.S. economic indicators -- the consensus in the markets is that the ISM's main index remains at an elevated level of 56.4 in November.

The figures proved to be a welcome relief to investors, who have for days only been interested in one thing -- whether Europe's debt crisis, which has already seen Greece and Ireland bailed out, will spread to other euro countries, notably Portugal, or more dangerously Spain. As a result, stocks around the world have been on the retreat, while the euro has slid to its lowest level since mid-September.

Some of those jitters were eased Wednesday by a fairly strong Portuguese auction of one-year Treasury bills. Though the yield the country had to pay rose to 5.28% from the previous 4.81%, the markets were encouraged that the rate was not even higher and that demand was buoyant.

"The bill auction was fully subscribed and went better than expected," said David Buik, markets analyst at BGC Partners.

Though the auction went better than feared, the deterioration in the markets' perception of Portugal's budgetary situation is clearly evident in a comparison with last year's equivalent auction, when the yield was only 2.88%.

Although Portugal is widely considered to be the most at risk of a bailout, the major worry in the market is a possible bailout for Spain. Most analysts think European authorities can handle bailing out the relative minnows of Greece, Ireland and Portugal, but Spain -- at around 12% of the euro-zone economy -- would be different matter altogether.

It's this worry primarily that has hit the euro hard over recent days. On Tuesday, it sank to $1.2968, its lowest since mid-September.

The improving stock market tone, coupled with mounting expectations that the European Central Bank will announce fresh crisis measures Thursday following its monthly policy meeting, has helped the euro recover some ground; by late morning London time, the euro was 0.8% higher on the day at $1.3090.

Meanwhile, the yen's continuing decline against the dollar has helped shore up Japanese stocks, with the Nikkei 225 closing up 0.5% at 9,988.05 -- a lower yen boosts Japan's exports, all other things being equal.

By late morning London time, the dollar was up 0.1% at 83.75 yen.

Elsewhere, Hong Kong's Hang Seng gained 1% to 23,249.80 and China's Shanghai Composite Index was up 0.1% at 2,823.44. Australia's S&P/ASX 200 closed flat at 4,586.6 after figures showed the country's economy grew by just 0.2% in the third quarter from the previous three months.

Benchmark oil for January delivery rose 85 cents to $84.96 a barrel in electronic trading on the New York Mercantile Exchange.
Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

If you liked this article you might like

What's Behind the Surge in Energy Stocks

What's Behind the Surge in Energy Stocks

Hillary Clinton Says Prosecuting Individuals is Key to Wall Street Reform

Hillary Clinton Says Prosecuting Individuals is Key to Wall Street Reform