Europe close: Stocks rally as French PM survives no-confidence votes

(Sharecast News) - Europe's Stoxx 600 finished firmly higher on Thursday as strong gains in France offset a tepid performance in London and Frankfurt.

The Stoxx 600 closed up 0.7% at 571.66. It has not closed above this level since reaching a record close of 573.79 on 8 October.

The CAC40 finished 1.4% higher at its highest finish since March, with the Paris benchmark now firmly above levels seen last week before the shock resignation - and subsequent reappointment - of prime minister S�bastien Lecornu.

"Once again the CAC40 has stolen the show as it rallies thanks to the survival of the French government," said Chris Beauchamp, chief market analyst at IG.

Lecornu on Thursday survived two no-confidence votes after saying he would suspend a controversial pension reform until after the 2027 election, giving equities a boost. His proposed suspension of president Emmanuel Macron's 2023 pension changes - raising France's retirement age from 62 to 64 - swayed opposition Socialist Party lawmakers against efforts to oust the prime minister.

He now has the tricky task of getting the rest of the government's unpopular budget measures through parliament, including spending cuts.

In economic news, the Eurozone posted a trade surplus of �1bn in August, down from �3bn a year earlier and sharply lower than both the �12.4bn recorded in July and the �6.9bn expected by economists. Initial estimates from Eurostat revealed that exports from the bloc fell 4.7% year-on-year to �205.9bn, while imports declined 3.8% to �204.9bn.

Meanwhile across the channel, the UK economy expanded modestly in August, according to official data, supported by the UK's dominant services sector. GDP grew by 0.3% in the three months to August, in line with expectations and a slight increase on the 0.2% uplift seen in July.

Market movers

Shares in Premier Inn owner Whitbread dropped 10% as the London-listed company downgraded its full-year profit outlook for Germany as it posted a drop in group interim profits and revenue.

German pharma giant Merck fell 5% after underwhelming investors with its medium-term targets, which included a mid-single-digit annual increase in organic sales and a one percentage-point expansion in operating margins.

Also in Frankfurt, Sartorius Stedim Biotech rose 10% after the biopharma equipment and materials company upgraded its full-year revenue guidance from 7% to 9% following an "excellent performance" over the year to date.

Nestle shares jumped 9% as new CEO Philipp Navratil laid out plans to sack 16,000 workers in the next two years in an effort to boost sales and cut costs.

London's Croda gained 7% as the speciality chemicals group reiterated its full-year outlook after a 4.4% increase in third-quarter sales.