Europe close: Bargain-hunting helps markets rebound from three-month low

The pan-European Stoxx 600 finished 1.08% higher at 507.03 with strong gains from the likes of Burberry, BMPS, Alstom, ASML and Siemens.

The index had fallen sharply over the past two trading sessions to settle at 501.59 on Wednesday – its lowest closing level since 12 August – as ongoing concerns about how Donald Trump's US presidential election victory may impact international trade. Ongoing political uncertainty in Germany has also weighed on sentiment this week.

"European indices finally got a bit of a break today, as dip buyers came in and prompted substantial gains in these beaten-down markets. Key levels were defended and the broad-based buying augurs well for a near-term recovery," said Chris Beauchamp, chief market analyst at IG.

"But with so much uncertainty around the implementation of the new administration’s policies, the relief might be short-lived."

In economic news, eurozone employment rose 0.2% in the third quarter, according to official flash estimates, in line with the previous quarter's growth and analysts' forecasts. Eurozone GDP data also met expectations, with the region expanding by 0.4% over the third quarter.

However, eurozone industrial production fell more than expected in September, dropping 2.0% compared to the previous month, worse than a 1.4% decline predicted by economists. The previous month's 1.8% growth figure was revised down to 1.5%.

Market movers

Shares in Burberry surged 20% on Thursday as the luxury goods brand launched a review of the business in an “urgent” effort to turn around its struggling fortunes after slumping to a £80m half-year loss driven by plunging sales in its key Chinese market. New chief executive Joshua Schulman said “Burberry forward” would target £40m in savings and focus on “reconnecting our brand with its original purpose”, mainly by targeting the outerwear market.

Other stocks in the sector, like Kering, LVMH and Christian Dior, were also in demand after US fashion giants Tapestry and Capri scrapped their planned $8.5bn merger following pushback from US regulators who argued that the tie-up would eliminate head-to-head competition in the luxury accessories market.

Shares in ASML Holding rallied 7% after the Dutch tech giant reiterated long-term targets, including annual revenues of up to €60bn. Launching its investor day, ASML said the long-term outlook for the semiconductor industry "remained promising", fuelled in part by the boom in artificial intelligence.

Banca Monte dei Paschi di Siena soared 12% after the Italian government cut its shareholding in the lender by 15%, raising €1.1bn. Peers Banco BPM and Anima Holding bought stakes in the world’s oldest bank.

Siemens jumped 5% after reporting record revenues in the past year, driven by robust demand in energy and electrification sectors, despite ongoing challenges in its business divisions.

French train manufacturer Alstom was also a high flyer, up 11% after reporting an 18% jump in first-half adjusted operating profits and reiterating its full-year targets.

Heading the other way was Polish e-commerce platform Allegro, which dropped sharply after saying it expected earnings growth to slow down to 4-7% at home in the fourth quarter following a 13.5% jump in the third.