EUROPE MARKETS: European Stocks Climb After Production Data

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- European stock markets rose on Wednesday, as investors welcomed a better-than-expected report on euro-zone industrial production.

Also of interest in the region, Germany's constitutional court continued its two-day hearing on the legality of the European Central Bank's bond-buying program, the Outright Monetary Transactions, or OMT program.

The Stoxx Europe 600 index added 0.5% to 293.13 after sliding 1.2% on Tuesday.

Shares of Kabel Deutschland Holding AG rallied 8.4% after Vodafone Group PLC (VOD) confirmed it has made a preliminary approach about making an offer for the German TV and Internet provider. Shares of Vodafone dropped 0.8%.

Volkswagen AG gave up 2.3% after the car maker recalled almost 26,000 vehicles in Australia due to faulty gearboxes.

Investors also focused on the euro-zone industrial-production data, which showed a 0.4% improvement in April, beating expectations of a flat to 0.1%-rise reading.

"The only negative element to this report is the distribution of out-turns at the national level, with the only material growth impulses coming from Germany and France while the rest of the major euro-area economies recorded much more lackluster figures," said James Ashley senior economist at RBC Capital Markets, in a note.

"In other words, of course it is positive news that the euro-area industrial sector has now managed to eke out three months of growth, but the heavy reliance on a single economy leaves the region vulnerable to any slowdown that might befall Germany. But, for now, we'll take what we can get and localized growth is better than no growth," he added.

In Germany, the final day of a two-day hearing about the ECB's unlimited bond-buying program got under way. Executive board member of the ECB Jörg Asmussen said at the hearing on Tuesday he was "firmly convinced that introducing the OMT program was the right thing to do to ensure price stability in the euro area. After all, a currency can only be stable if its continued existence is not in doubt."

Meanwhile, Bundesbank President Jens Weidmann said unlimited bond purchases would infringe the ECB's mandate. The Bundesbank has earlier criticized the OMT program for creating moral hazard and taking pressure off errant governments. Read: Just say no to ECB bond-buying.

Among notable movers on Wednesday, shares of HeidelbergCement AG lost 3.7% in Frankfurt after Morgan Stanley cut the firm to equal weight from overweight.

The DAX 30 index , however gained 0.1% to 8,232.11.

France's CAC 40 index rose 0.5% to 3,828.99, with shares of oil giant Total SA (TOT) up 0.5%.

The U.K.'s FTSE 100 index rose 0.1% to 6,347.32.

Greek stocks bucked the positive trend on Wednesday, after equity index provider MSCI Inc. (MXB) lowered the country to emerging-market from developed status. Adding to Greece's woes, the government shut down its state broadcaster, the Hellenic Broadcasting Corporation (ERT), triggering protests outside the firm's headquarters.

The Athex Composite lost 1.5% to 882.49.

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