(Sharecast News) - European equities closed higher on Thursday as stronger-than-expected results from Nvidia lifted sentiment across the region and helped offset persistent worries about stretched artificial intelligence valuations.
Russ Mould, investment director at AJ Bell, said Nvidia's reassuring results "have brought a sense of calm to markets following a wobbly few days," adding that "Europe enjoyed a nice bounce, including a gain from the FTSE 100 led by tech stocks, banks and natural resources firms."
The Stoxx 600 rose 0.4% to 563.94, while Germany's DAX added 0.5% to 23,278.85.
France's CAC 40 gained 0.34% to 7,981.07 and London's FTSE 100 advanced 0.21% to 9,527.65.
Nvidia's shares jumped in after-hours trading after the chipmaker posted record third-quarter revenues of $57.0bn, up 22% from the previous quarter and 62% year-on-year, comfortably ahead of the $54.7bn expected by analysts.
The company also raised its fourth-quarter guidance to $65bn, above market forecasts of $62.1bn, easing recent fears of an AI-driven bubble and supporting gains in European semiconductor stocks.
Patrick Munnelly, market strategy partner at TickMill, said "stocks soared as Nvidia unveiled a robust revenue forecast, easing fears of an AI sector bubble that had previously rattled global markets," noting that Nvidia's blowout numbers had "sparked a rally among other AI-related stocks" and boosted global equity futures.
Dutch chip firms BESI and ASMI rose 0.7% and 0.8%, respectively, while equipment supplier ASML ended nearly 0.4% higher.
Mould said investors had been cautious ahead of the release, warning that "the slightest bit of negative news from the chip giant could cause a proper market pullback," but that Nvidia's figures were "as comforting as a warm cup of tea on a cold day."
US jobs data finally gets released, eurozone construction output falls
Economic data offered a mixed backdrop.
In the United States, non-farm payrolls rose by 119,000 in September, beating expectations for 50,000 and marking the strongest monthly gain in five months.
However, the Bureau of Labor Statistics also issued downward revisions for July and August, while the unemployment rate edged up to 4.4%, the highest since October 2021.
Rostro analyst Joshua Mahony said the report "brought a little for everyone," noting that initial optimism faded once revisions and the rise in unemployment were taken into account.
He added that the figures were "unlikely to massively shift the needle" for the Federal Reserve's December meeting.
US existing home sales rose 1.2% in October to an annualised 4.10m, the highest level in eight months, helped by lower mortgage rates.
In Europe, construction output in the euro area fell 0.5% in September, driven by declining building activity, while production was flat across the wider EU.
Annual figures showed eurozone building construction down 4.1%, partially offset by stronger civil engineering output.
UK data highlighted weakening consumer sentiment and slowing industrial activity.
The British Retail Consortium reported that consumer confidence fell to its lowest level since April, with 58% of respondents expecting the economy to deteriorate over the next three months.
Separately, the CBI's Industrial Trends survey showed manufacturing output declining at the fastest pace since August 2020, with firms citing uncertainty ahead of next week's Autumn Budget.
China's central bank held its one-year and five-year loan prime rates steady at 3% and 3.5% for a sixth consecutive month, as Beijing continued to contend with a prolonged property downturn, soft demand and slowing third-quarter GDP growth.
Munnelly noted that Asian markets had staged a relief rally following Nvidia's results, with "tech-focused markets in Japan, South Korea and Taiwan leading the upward movement" as demand for the company's AI processors remained strong.
Halma jumps on strong first half, Greggs slides
Corporate updates added further momentum to select European stocks.
Halma surged 9.24% after the safety equipment group lifted its interim dividend and reported strong first-half performance across all sectors.
Games Workshop jumped 13.49% after forecasting core revenues of at least 310m for the six months to 30 November, up from 269.4m a year earlier.
Mould said the announcement was "a typically short but ultimately sweet trading update ... that has fired up enthusiasm for the stock," highlighting the company's "dedicated fans" and the long-term potential of its partnership with Amazon.
BNP Paribas climbed 4.4% after raising its CET1 ratio target to 13% by 2027 and launching a 1.15bn share buyback.
On the downside, Greggs slipped more than 2% following news that Robert Moorhead, former WH Smith finance chief, had withdrawn from an expected board appointment after an accounting probe at the retailer, whose shares ended down 1.8%.
Reporting by Josh White for Sharecast.com.
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