Stocks are mounting a comeback following early weakness that some market commentary is attributing to an overnight drop in Chinese equities on the heels of continued upwards pressure on bond yields in the Asian giant.

Very strong readings from euro area surveys of manufacturing and service sector conditions were the chief factor behind the recovery in shares, alongside reports that Germany's main political parties might be making headway in crafting a stable government.

"Of course we want to help Germany and we haven’t ruled out anything," Karl Lauterback from Germany's Socialist SPD party told ZDF television in an interview.

Lauterback also said a 'grand coalition' with Chancellor Merkel's centre-right CDU/CSU was one of the options on the table - as a last resort.

Against that backdrop, as of 1206 GMT the benchmark Stoxx 600 was edging 0.04% or 0.17 points higher to 387.23, alongside a 0.62% or 33.50 point jump for the Cac-40 to 5,386.47.

Stocks on the euro area periphery were also on the up, with Spain's Ibex 35 gaining 0.57% or 57.40 points at 10,071.30.

Germany's Dax on the other hand was again the weakest of the Continent's main equity benchmarks, slipping 0.16% or 20.35 points to 12,994.55, alongside a 0.26% rise in euro/dollar to 1.1846.

Overnight, the Shanghai Stock Exchange's Composite Index gave back 2.29% to close at 3,351.92, its sharpest one-day fall since mid-2016. The losses came on the heels of another move in 10-year Chinese government bond yields above the 4.0% mark.

However, accumulated losses in that Chinese benchmark during the past month were a rather more mundane 0.85% and it was still 3.42% ahead for the preceding 12 months.

To take note of as well, the minutes of the US central bank's last policy meeting, released overnight, did little to lift the mist of uncertainty which had recently blanketed forecasts for further rate hikes in the States in 2018.

Commenting on the content of those minutes, Michael Hewson, chief market analyst at CMC Markets UK, said: "A December rate move remains a done deal in the eyes of the markets. It's what comes after that which is becoming less clear."

On the economic front, IHS Markit's preliminary composite purchasing managers' index for Eurozone manufacturing and services sector activity jumped to a 79-month high of 57.5 in November (consensus: 55.9), from 56.0 for October.

"Jobs are being created at the fastest rate since the dot-com boom, yet despite this increase in operating capacity firms are struggling to meet demand. Backlogs of uncompleted work are growing at the fastest rate for over a decade, often resulting in a sellers’ market as customers struggle to source goods and services. Prices are consequently rising at an increased rate," said Chris Williamson, chief business economist at IHS Markit.

As an aside, in an interview with La Repubblica, Italy's economy minister said his country's economy might grow by more than 1.5% in 2017.

Meanwhile, in corporate news, Thyssen Krupp was firmly in focus after the steel giant posted a 30% jump in its full-year operating profits.

French spirits-maker Remy Cointreau on the other hand was under the cosh despite reporting an 11.8% rise in its first half like-for-like operating profits.