Source: Sharecast
The pan-European benchmark was up 0.8% at 546.23, having dropped 2% over the past two trading sessions, with 1.1% gains in Frankfurt and Paris providing a lift. The Stoxx 600 fell to its lowest in nearly two weeks on Wednesday.
Thursday's gains came despite an increase in European bond yields, with yields on 10-year bonds in Germany, Italy, Spain and the UK all on the rise.
"Rising bond yields are not holding back stocks. European indices are higher across the board. Risk sentiment has been boosted by news that Donald Trump won’t fire the Fed chair, and that he will offer 150 countries tariff rates of between 10% - 15%, which is lower than some feared, even if countries like Canada and the EU face much higher tariff rates," said Kathleen Brooks, research director at XTB.
In economic news, the UK unemployment rate unexpectedly rose to 4.7% in the three months to May from 4.6% a month earlier, hitting the highest level since early 2021. Meanwhile, annual wage growth for both regular earnings and total earnings (which include bonuses) was 5%, slowing from 5.3% and 5.4%, respectively, a month earlier.
Matt Swannell, chief economic advisor to the EY ITEM Club, said that while the Bank of England remains cautious about cutting interest rates too quickly, "with signs that key determinants of domestic inflationary pressures are still slowly cooling, we expect the MPC will cut Bank Rate in August".
Still to come, the final reading of eurozone inflation for June is due out at 1000 CEST, with no change expected from the initial estimate released two weeks ago, which showed that the annual rate of inflation rose to 2.0% last month from 1.9% – in line with the European Central Bank's target. In the US, there will be a range of key economic indicators released, including jobless claims, the Philly Fed manufacturing survey and retail sales data.
Market movers
London's Ocado Group was a standout performer, surging 12% early on after the release of its first-half results. The retail tech and logistics company said its full-year outlook remains on track after swinging to a big profit in the first half, in which revenues rose at a double-digit rate.
Swedish vegetable oils group AAK was also a high riser, jumping 10% after reporting a second-quarter operating profit comfortably ahead of market forecasts.
Heading the other way was British budget airline EasyJet which dropped 7% after warning that profits would be impacted by recent French industrial action.