By Anastasiia Kozlova, Johann M Cherian and Tharuniyaa .
(Reuters) -European shares closed higher on Thursday after AI bellwether Nvidia’s results quelled concerns around an AI bubble, but pared earlier gains as uncertainty over the U.S. monetary policy path weighed on investor sentiment.
The pan-European STOXX 600 ended up 0.4% at 563.94 points. Other major regional indexes also gained with those in Germany and France up 0.5% and 0.3%, respectively.
Chip designer Nvidia’s blowout quarterly results and positive outlook came at a crucial time for investors, who have been rattled in recent weeks by fears of an AI bubble.
“What makes us excited about the tech sector and Nvidia is that the demand for AI is still bigger than supply. So that kind of capex span that the market is somewhat worried about is still there,” said Marija Veitmane, head of equity research at State Street Global Markets.
“Nvidia results suggest that those earnings are likely to remain strong, very visible, and that’s a very strong support for the equity market.”
US LABOR MARKET REMAINS SLUGGISH
Meanwhile, data showed U.S. job growth accelerated in September, but the unemployment rate rose to 4.4%, suggesting labor market conditions remained sluggish. Traders continued to bet the Federal Reserve will skip an interest rate cut in December.
The European tech index pared earlier gains to edge up 0.1%.
“We are seeing European tech stocks caught up in the overall enthusiasm for the tech trade,” said Laura Cooper, head of macro credit at Nuveen.
AI equipment makers that have benefited from the technology boom, such as Siemens Energy gained 2.9%.
Europe’s defence index was up 1.3%, having slid nearly 3% on Wednesday on signs of a new U.S.-led push to end the Russia-Ukraine war. Rheinmetall gained 2.6%, while Leonardo added 2.9%.
Bank stocks rose 0.8% and energy climbed 1.1%.
European auto stocks lost 1.4%. French car parts supplier Valeo fell 13% after it provided mid-term guidance below expectations. The media sector declined 1.9%.
Among other moves, BNP Paribas gained 4.4% after the French bank raised its CET1 ratio target, a gauge of financial stability, to 13% by 2027.
Games Workshop shares hit a record high, up 13.5%, on a strong half-year forecast, while Halma rose 9.2% after raising annual revenue forecast.
JD Sports Fashion lost 3.9% after it forecast annual profit at the lower end of market expectations.
Data showed euro zone consumer confidence remained stable at -14.2 in November.
(Reporting by Anastasiia Kozlova, Johann M Cherian, Sukriti Gupta and Tharuniyaa Lakshmi; Editing by Sonia Cheema, editing by Ed Osmond)
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