European Stocks Close On Strong Note

European stocks closed higher on Thursday as U.S. lawmakers reached an agreement to temporarily extend the debt limit, avoiding a potential default.

Senate Majority Leader Chuck Schumer, D-N.Y., announced an agreement to extend the debt ceiling through early December. The agreement would reportedly increase the debt limit by $480 billion, allowing the Treasury to continuing paying its bills through December 3rd.

Markets also benefited from a drop in U.S. Treasury bond yields, and data showing a bigger than expected pullback in first-time claims for U.S. unemployment benefits in the week ended October 2nd.

Meanwhile, anxiety over the energy price crunch eased after Russian president Vladimir Putin suggested that state-backed Gazprom could increase supplies to help Europe avoid a full-blown energy crisis.

Investors shrugged off concerns about inflation and data showing a sharp drop in German industrial output in the month of August.

Markets have now shifted their focus on the upcoming U.S. non-farm payrolls data, due on Friday.

The U.S. jobs report is seen as crucial in influencing the timing of the start of winding down the Fed’s QE program.

The pan Eurpean Stoxx 600 climbed 1.6%. The U.K.’s FTSE 100 gained 1.17%, DAX surged up 1.85% and France’s CAC 40 advanced 1.65%, while Switzerland’s SMI jumped 1.68%.

Among other markets in Europe, Belgium, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Portugal, Russia, Spain, Sweden and Turkey ended notably higher.

Czech Republic and Poland edged up marginally, while Austria closed weak.

In the UK market, Antofagasta, Anglo American Plc, Standard Chartered, Johnson Matthey, BHP Group, Rio Tinto, Scottish Mortgage, Evraz, Aveva Group and Pershing Square Holdings gained 3 to 5.3%.

Workspace Group shares gained about 5%. The real estate investment trust company said that customer demand improved during the second quarter of fiscal 2022.

CRH, Intertek Group, Smurfit Kappa Group, ICP, HSBC Holdings, Royal Mail, IHF, Auto Trader Group and Entain also moved up sharply.

IAG, Natwest Group, Admiral Group, Ocado Group and Hargreaves Lansdown shed 1 to 2%.

In France, Faurecia climbed nearly 6.5%. Valeo ended almost 6% up. Saint Gobain, ArcelorMittal, Hermes International, Unibail Rodamco, WorldLine, Kering, Credit Agricole, Safran, Renault, LVMH and Societe Generale gained 2 to 4.5%.

In the German market, Sartorius rallied about 6%. Deutsche Bank, Daimler, Continental, Porsche Automobil, Linde, Puma, Covestro, BASF, BMW, Volkswagen, Bayer, Adidas, SAP and Siemens gained 1.7 to 4.3%.

TeamViewer shares fell 7% to extend losses from the previous session after the software company reported quarterly results below its own expectations and cut its full-year guidance.

Sika AG shares gained 3%. The Swiss specialty chemicals company confirmed fiscal 2021 targets, expecting sales growth in local currencies of 13 percent-17 percent as well as an over-proportional EBIT increase.

Spanish utility Iberdrola surged 7% after reports that the company is in talks with the Spanish government over energy pricing.

In economic releases, German industrial output fell 4% month-on-month in August, reversing a 1.3% rise in July, Destatis reported. Economists had forecast a monthly fall of 0.4%.

Compared with February 2020, the month before restrictions were imposed due to the corona pandemic, production was 9% lower in August.

On a yearly basis, industrial production gained 1.7% after rising 6% a month ago.

House prices grew 1.7% month-on-month in September, following an increase of 0.8% in August as stamp duty holiday draws to a close, survey data released by the Lloyds Bank subsidiary Halifax showed. This was the third consecutive rise in prices.

In three months to September, house prices grew 1.5% from the previous three months. The annual rate of house price growth increased to 7.4% from 7.2% in August.