Europe close: Stocks extend advance on news out of China, U.S.

European shares pushed higher as Chinese President Xi Jinping for a greater opening up of the Asian giant's economy.

Further gains were triggered after June consumer price data in the US surprised to the downside.

The pan-regional Stoxx 600 index was up 1.51% against a backdrop of big gains on either side of the Pond.

A sub-index of the Stoxx 600 tracking shares of Basic Resources firms jumped by 3.7%.

Out of the U.S., the Department of Labor reported softer-than-expected readings for headline and core consumer prices.

And some economists said they were anticipating still smaller month-on-month gains in the Consumer Price Index over the next two months.

In equity news, Defence group Thales caught a bid after its started talks to buy the French supplier of airborne avionics systems Cobham Aerospace Communications for $1.1bn.

Virgin Money surged after the bank passed the Bank of England's annual capital adequacy stress test.

AXA shares gained as the company was reportedly considering offloading its property reinsurance business to cut disaster risk.

Grafton shares advanced as the building materials supplier held guidance as first-half revenues rose 3.2% despite the cost-of-living crisis hitting volumes.

Norway's DNB Bank fell despite reporting a bigger-than-expected rise in quarterly earnings, driven by a robust economy and higher interest rates.

Bunzl slipped after RBC Capital Markets downgraded the transport and distribution giant to ‘underperform’ from ‘sector perform’ and cut the price target to 2,550p from 2,850p as it said deflationary forces are building.