European shares gain ground, led by industrials after strong euro zone manufacturing data

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* European major indexes up as manufacturing activity expands
* Basic resources, industrials lead sectors higher
* Volvo, Siemens shine after earnings beats
* Ocado loses ground after Tuesday's rally
By Helen Reid
LONDON, Feb 1 European shares were firmly up on Wednesday after three days of losses, with basic resources and industrials leading, boosted by healthy corporate results and positive manufacturing data out of regional heavyweights France, Germany and Italy.
The pan-European STOXX index was up 0.8 percent, led by Swedish truck maker Volvo and German engineering giant Siemens.
French manufacturing activity expanded at the fastest pace in nearly six years in January as demand firmed up, while German factory growth was the highest in three years, and Italy's also increased, albeit at a slower pace.
"Buoyed by the prospects of a reflationary US economic policy under President Trump, it looks like manufacturers are ramping up activity," said Neil Wilson of ETX Capital, in a note.
Volvo shares were the top European gainers, up 6.4 percent after the company substantially outperformed forecasts with a core profit of 5.66 billion Swedish crowns, and raised its forecast for the European truck market.
Volvo's strength could also have been supported by Sweden's manufacturing sector growth, the fastest in six years.
Shares in Siemens hit their highest level since September 2000, after it raised its outlook, with industrial business profit jumping in the fiscal first quarter.
"Clearly Siemens' transformation is under way and we see little reason why the stock would not move more towards a sector multiple," Liberum analysts said in a note, reiterating their 'buy' rating on the stock.


Industrials across Europe were buoyed by the manufacturing data, with materials firm Saint Gobain and tire manufacturer Michelin top gainers in France's CAC 40 index.
Finnish paper maker UPM-Kymmene was recovering slightly from its biggest ever daily drop yesterday, up 3.9 percent, while Swedish oil company Lundin Petroleum was up 4 percent after its Q4 earnings beat consensus.
Spanish telecoms company Cellnex Telecom gained 5.5 percent, nearing its best ever daily gains, after announcing an 854 million euro deal with French telecoms giant Bouygues to build 3,000 telecoms sites in France.
Shares in British online supermarket Ocado, which rallied sharply yesterday on better-than-expected profits, were down 4.2 percent, top fallers in the STOXX 600, hitting their lowest level since July 2016.
British asset manager Henderson Group was a top European faller after Barclays cut its target price on the stock.
Swedish stocks featured on the list of the biggest laggards across Europe too with home appliance maker Electrolux down 3.1 percent after results disappointment. (Editing by Toby Chopra)