European stocks close higher despite mixed economic data

European stock markets closed higher on Tuesday, with Italy's FTSE MIB index leading gains among the continent's major bourses, even as a mixed batch of economic data pointed to uneven conditions across the eurozone.

Investors weighed a sharp slump in German factory orders against a rise in eurozone retail sales, a combination that left traders divided on the near-term outlook for the region's largest economies.

Mixed signals from Germany

Germany's manufacturing sector, often seen as a bellwether for the broader eurozone economy, reported a significant drop in factory orders. The decline renewed concerns about the health of Europe's industrial base, which has struggled with weak demand and higher input costs in recent years.

At the same time, data showing stronger retail sales across the eurozone offered a counterpoint, suggesting consumer spending remained resilient despite the headwinds facing manufacturers.

Italy leads gains

Against this backdrop, Italy's FTSE MIB outperformed its regional peers, closing with the strongest gains among major European indices. Other markets across the continent also finished in positive territory, though the scale of advances varied by country.

Analysts said the divergence between weak industrial data and firmer consumer indicators left markets with no clear directional signal, with investors likely to continue parsing incoming economic releases for a clearer picture of the eurozone's trajectory in the months ahead.