Europe close: Stocks higher on trade war optimism

European stocks were higher on Thursday after US President Donald Trump said Washington and Beijing could be nearing a resolution to their long-running trade spat.

At the market close, the Stoxx 600 was 0.61% higher at 389.95 as the German Dax rose by 0.44% to 12,288.54 and France's CAC 40 climbed by 0.66% to 5,620.57. Meanwhile, London's FTSE 100 jumped 0.84% to 7,351.08.

"It's been a positive day for markets in Europe as the bi-polar nature of the narrative around trade became more optimistic, after China’s Ministry of Commerce said that they would be buying more US pork and soybean products," said Michael Hewson, chief market analyst at CMC Markets UK.

Trump had told reporters on Wednesday that a trade deal with China "could happen sooner than you think", as he announced that his administration had secured a separate agreement with Japan that would open up markets to around $7bn-worth of US agricultural products.

"This optimism appears to currently outweigh concerns about impeachment surrounding the US President, and the controversial telephone conversation President Trump had with the Ukraine President Zelensky, though we have come off the highs in the afternoon with US markets acting as a bit of a drag, as testimony begins on Capitol Hill over the White House whistle-blower allegations," Hewson added.

In London, MPs appeared no closer to a Brexit resolution after a lively return to parliament as Prime Minister Boris Johnson accused his opponents of running scared from an election.

Among individual stocks, education publisher Pearson led the Stoxx 600 lower as it said adjusted operating profit will be at the bottom of its guidance range of £590m to £640m following weaker-than-expected trading in its US higher education courseware business in the key selling season.

Imperial Brands shares tumbled as the tobacco giant cut its annual revenue guidance amid challenges in the US vaping market and weakness in Africa, Asia and Australasia.

Dutch bank ABN Amro was also sharply lower after it confirmed it is under investigation for money laundering in the Netherlands, with prosecutors suggesting that the the bank failed to investigate or sever ties with suspect clients.

Demant fell after the Danish hearing aid manufacturer slashed its annual operating profit outlook and suspended a share buyback following a cyber attack that hit all of the company's major units at the beginning of September.