By Ambar Warrick
(Reuters) - European shares rose on Friday, their first positive session of the week, as better-than-expected business activity data from the bloc pointed to a likely recovery in 2020.
The pan-European STOXX 600 <.STOXX> climbed 0.9%, having crossed a record high earlier in the day. The index had marked four straight sessions of declines amid widespread concerns over a new virus causing economic disruptions in China, one of the bloc's biggest trading partners.
While the HIS Markit's Euro Zone Composite Flash Purchasing Managers' Index (PMI) came in slightly below expectations, a surprise jump in manufacturing activity brewed some optimism over a return to expansion in 2020.
"With a Phase 1 trade deal in place, additional no car tariffs for the moment and some certainty about the Brexit timeline, some of the factors holding back manufacturing output have improved," ING economists wrote in a note.
"With manufacturing showing early signs of recovery and the service sector continuing to grow, chances of a recession are receding further. We are expecting growth to very gradually pick up over the course of the year."
Utilities <.SX6P> were among the best performing subindexes, with German renewables player RWE
Technology stocks <.SX8P> also rose, with stronger results from U.S. chipmaker Intel Corp
Germany's DAX <.GDAXI> saw its best day in more than two months after PMI data showed that the country's private sector gained momentum in January, while a pullback in manufacturing eased.
UK bluechip stocks <.FTSE> closed higher after PMI data showed that Britain's services sector returned to growth in January.
Among individual stocks, Bayer
Swedish telecoms equipment group Ericsson
Nokian Tyres
Shares of French pharma company Ipsen
(Reporting by Ambar Warrick in Bengaluru; editing by Nick Macfie)