European shares close higher on China data, but log worst first quarter ever

European shares closed higher Tuesday, after some positive Chinese manufacturing data, but completed their worst quarter since 2002 due to the coronavirus crisis and fears of an immediate recession in the region. 

The pan-European Stoxx 600 closed up 1.5%, paring earlier gains, with travel and leisure stocks adding 4.9% while banks fell 0.1%.

For the trading quarter, the index posted its worst three months since 2002, down 23.1%, which is its worst first quarter ever. Spain's IBEX fell 30% during the period, Italy's FTSE MIB lost 28%, and German and British blue-chips both lost around 25%.

On Tuesday, European stocks reacted positively to data out overnight showing that China's official manufacturing Purchasing Managers' Index (PMI) for March came in better than some analysts expected.

China said its official manufacturing PMI for March came in at 52.0, indicating an expansion and defying expectations of a contraction. Analysts polled by Reuters had expected the figure to come in at 45 for the month. PMI readings below 50 signify a contraction, while figures above that level indicate an expansion. Mainland Chinese stocks were higher by Tuesday afternoon in Asia following the data.

Meanwhile, the coronavirus continues to dominate global market sentiment and governments. The U.S. has the highest number of cases, at over 165,000, followed by Italy, Spain, China and Germany.

On Wall Street Tuesday, stocks rebounded on the last day of the first quarter, as investors wrapped up a period of historic market volatility sparked by the pandemic.

In other news, Spain's fourth-quarter GDP (gross domestic product) grew by 0.4%, official data showed Tuesday, slightly below an earlier flash estimate, representing annual growth of 1%. France's annual CPI (consumer price index) inflation in March fell to its lowest level since 2016, coming in at 0.7% year-on-year, while Italian EU-harmonized CPI came in at 0.1% year-on-year, slightly above expectations.

In terms of individual stocks, German meal kit delivery firm Hellofresh continued to benefit from lockdown measures, climbing 13%, while British property developer Hammerson added more than 16%.

At the other end of the Stoxx 600, Belgian electricity provider Elia Group dropped 7.3% alongside firms like Safran and Natixis.

Correction: This article has been updated to accurately reflect the historical percentage moves for the Stoxx 600.