Europe close: Shares extend gains on economic data, China stimulus talk

European shares extended gains on Thursday, with Basic Resources and Autos&Parts following a recent string of better-than-expected data in the US and talk of fiscal stimulus in China.

"To be fair the global outlook for indices seems to be brighter in the wake of yesterday’s Fed minutes, if only because everyone seems to be glad to get the issue out of the way for a while," was IG chief market analyst Chris Beauchamp's take on matters.

"The recent fall in commodity prices might provide some temporary relief on inflation, and perhaps earnings season will surprise on the upside when it kicks off next week.”

Some analysts also attributed the better tone in markets to a recent flurry of stronger than expected economic reports in the US.

The pan-regional Stoxx 600 index notched up a gain of 1.88% to 415.01, alongside a 1.97% jump for the German Dax, while the Italian FTSE Mib racked up a gain of 3.05% to 21,558.07.

Euro/dollar was little changed off by 0.27% to 1.0155.

By sectors, Basic Resources spearheaded the advance on the Stoxx 600, jumping 5.43% to 560.29 while the Autos&Parts sector index rose 5.29% to 501.24.

As an aside, Bloomberg reported that authorities in Beijing were mulling bringing forward $220bn of bond sales to the back half of 2022 to finance a fiscal stimulus package.

In equity news, semiconductor firms STMicroelectronics, BE Semiconductors, ASM International, ASML Holding all made gains after Samsung posted its best April-June profit since 2018, driven by strong memory chip sales to server customers.

Shares in Tenaris jumped 8% after Jefferies raised its price target on the stock.

UK housebuilders were in the red after Persimmon warned on higher building costs due to increases in wages and raw materials prices. However, it still expected annual profits to be “slightly” ahead of last year. Rival Barratt was also lower on the news, but Berkeley reversed earlier losses.

Gambling shares tanked after Entain said online revenues would be flat. Flutter and Evolution Gaming Group followed suit.