Europe midday: Shares rally; Richemont surges on China earnings

European shares rallied on Thursday after a cautious start that saw them dip into the red as investors digested comments from central bankers this week that poured cold water on the idea of early interest rate cuts this year.

The pan-European Stoxx 600 index was up 0.46% at 469.87 in early deals. US markets closed in the red, while Asia trade was mixed.

Sentiment was also hit by continuing tit-for-tat attacks in the Red Sea between US forces and Iran-backed Houthi rebels in the last 24 hours, keeping oil prices above $78 a barrel.

Brent crude was also supported by OPEC reaffirming its projection of robust growth in global oil demand for 2024 on Wednesday, as well as offering an early outlook for 2025, highlighting China and the Middle East as the driving forces behind the surge.

Traders were also looking at another dump of corporate trading updates.

Watches of Switzerland shares tanked after the luxury goods seller cut revenue guidance and warned of continuing volatility as consumers shunned its expensive products.

However, sector peer and Cartier owner Richemont made strong gains after a trading update revealed strong demand in China, although sales fell in Europe.

Shares in Paddy Power and Betfair owner Flutter Entertainment jumped by more than 10% despite fourth-quarter revenues coming in below guidance, with investors showing optimism about the company's planned listing on Wall Street with significant potential for growth in the key US market.

Reporting by Frank Prenesti for Sharecast.com