Upbeat economic news helped push European stock markets higher on Thursday, while stronger-than-expected data in Britain drove sterling to an 11-month high ahead of a Bank of England monetary policy decision.

European equity markets gave up early falls to nudge into positive territory, with stock markets in Italy and France 0.2-0.3 per cent higher. Britain's blue-chip FTSE was also marginally higher, although Germany's main stock index was a touch lower.

“After some symbolic moves in US markets, we have taken a break but some European markets like Italy are doing really well thanks to a plethora of good news,” said Kathleen Brooks, research director at City Index.

Data on Thursday showed Italy's service sector posted its fastest growth for a decade in July, boosting prospects for economic output in the euro zone's third-largest economy.

Other data showed retail sales in the euro zone increased by 0.5 per cent in June on the month, well above market expectations of a 0.1 percent rise.

Shares in Italy's largest bank Unicredit climbed almost 5 per cent after reporting forecast-beating profits for the second quarter, while British retailer Next jumped 9 percent after returning to sales growth in its latest quarter.

The positive earnings news helped lift sentiment in European equity markets, allowing them to recover from early falls as investors took profits on strong gains after the Dow Jones Industrial Average on Wednesday broke the 22,000 barrier for the first time in its 121-year history.

Trade in US stock market futures pointed to a flat open on Wall Street later in the day .

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7 per cent and South Korea's tech-heavy Kospi index slumped 1.7 per cent to its lowest level in over three weeks. Seoul shares took an additional hit from President Moon Jae-in's new tax plan.

Japan's blue-chip Nikkei stock index closed down 0.3 per cent .

Sterling high

Sterling hit an 11-month high at $1.3267 after data from the services sector came in stronger than expected, as traders looked to a Bank of England policy decision for a steer on when interest rates might be raised.

The BoE looks set to keep interest rates at a record low once again on Thursday, but investors are looking out for signs that it is getting nearer to raising rates for the first time in a decade.

The dollar inched away from a 15-month low versus a basket of currencies, but was still looking wobbly due to doubts about whether there will be another US interest rate rise this year.

US inflation has been contained even as the labour market appears to be in its best shape in many years, with the jobless rate staying near a 17-year low.

Friday's closely watched government employment report could provide more clues on the economic outlook.

The dollar index, which measures the greenback's value against a basket of six major currencies, rose about 0.1 percent to 92.930. On Wednesday, it slid to 92.548, its weakest level since May 2016.

The euro was a touch weaker at $1.1841, after rising to around $1.1911 on Wednesday, its highest level since January 2015.

Oil prices meanwhile rose, lifted by signs of a tightening US market, although high supplies from OPEC producers weighed on sentiment.

Brent crude futures rose 0.5 per cent to $52.60 per barrel, not far from Wednesday's high of $52.93, its highest level in 10 weeks.

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