Europe close: Stocks jump on favourable US-China trade news
Continental markets gained on Thursday after comments from China's Commerce Ministry raised optimism for a calm resolution to the US-China trade war.
Europe's main stock market indices began the day largely on the back foot but turned higher after assurances from Beijing that China would not seek to escalate of the trade war with the US by immediately retaliating to Washington's latest round of tariffs, with the Chinese government instead claiming that it was willing to resolve the issues at hand with a "calm" attitude.
The pan-European Stoxx 600 index finished up 1.04% at 376.74 as Italy's FTSE MIB led the way with a 1.94% increase after President Sergio Mattarella gave Prime Minister Giuseppe Conte a mandate to form a new coalition government.
In parallel, the yield on the benchmark 10-year Italian government note was down by six basis points to 0.98% after hitting a 52-week low a 0.92% earlier in the session.
Meanwhile, the French CAC 40 climbed by 1.51% and the German Dax index traded 1.18% higher.
CMC Markets analyst David Madden said the comments from Beijing had lifted investor sentiment and coaxed some traders back into the market.
The FTSE 100 was 1.12% higher at 7,194.30, aided by the news from Beijing and despite a small rebound in the pound.
Bloomberg reported that European Union officials - speaking on condition of anonymity - were not ruling out an agreement with the UK in the coming weeks with one of those saying that the prorogation of Parliament might increase the pressure on some lawmakers to approve a new deal.
In corporate news, IT group Micro Focus plummeted by almost 33% as it warned on profits amid lower customer spending due to Brexit uncertainty and economic concerns.
Recruiter Hays dropped as it reported a drop in annual profits and highlighted tough conditions in the UK and Germany.
Laboratory testing group Eurofins Scientific SE climbed by 6% after beating earnings estimates and scoring double-digit revenue growth, while Pernod Ricard rose by 3% after increasing its dividend and announcing a share buyback programme.
French industrial group Bouygues jumped by 7% after reporting better than expected operating profits on the back of strong growth in its telecoms and television divisions.
Economic news out in the background was somewhat mixed with German unemployment claims rising by a greater than expected 4,000 in August (consensus: 3,000).
Claus Vistesen at Pantheon Macroeconomics saw "clear" evidence in the data that Germany's labour market was beginning to strain on the back of slower economic growth, but believed pressure on Berlin to increase spending and investment would "be a story for 2020".
German consumer prices also undershot economists' forecasts in August, with the year-on-year rate of increase slipping from 1.1% for July to 1.0% (consensus: 0.2%), according to the country's Federal Office of Statistics.
Despite that, and heading into the European Central bank's policy meeting in September, Dutch central bank head, Klaas Knot, told Bloomberg in an interview that he did not see a need for further quantitative easing in the euro area, adding that market expectations going into the September ECB policy meeting were "overdone".
The European Commission's surveys of euro area of consumer and industrial confidence for August on the other hand beat expectations.