(Bloomberg) -- European stocks rose for a third straight session, with sentiment boosted by upbeat global economic data and bets that the Federal Reserve will reduce interest rates next month.
The Stoxx Europe 600 Index was up 1.1% by the close, extending gains after stronger-than-expected US retail sales and a decline in weekly jobless claims.
European technology shares and banks outperformed, while real estate and utilities lagged.
Shares in Bavarian Nordic A/S, one of the few companies with an approved mpox vaccine, jumped. The World Health Organization declared a fast-spreading outbreak of the virus in Africa a global public health emergency on Wednesday. Among other single stocks, Orsted A/S declined as it booked an impairment of more than $500 million, while Adyen NV rose after beating estimates in the first half of the year.
Equities are recovering after a rough start to August as resilient economic data calm concerns about a US recession. Figures Wednesday showed easing US inflation, and were followed by encouraging data from Japan and China on Thursday.
“We think the US recession fears are exaggerated and are cautiously optimistic,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg, who used the selloff last week to increase exposure to stocks. “Equity markets now correlate positively with macro surprises, which means good data are good for stocks and bad data not.”
Traders are now pricing in a rate cut of about 90 basis points from the Fed by the end of the year, according to swaps data.
Stock markets in Italy and Poland were closed for a local holiday.
For more on equity markets:
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- So Long, Services Inflation: The London Rush
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--With assistance from Michael Msika.
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