Europe Shares Close Higher as US Rallies
European shares extended gains to close higher on Thursday, following upbeat data from the U.S. The pan-European FTSEurofirst 300 Index provisionally gained 0.8 percent, ending at 1,158.97 points.
U.S. unemployment data showed weekly first-time jobless claims fell 9,000 last week to a seasonally adjusted 346,000, while consumer spending rebounded 0.3 percent in May, after a 0.3 percent decline in the prior month.
Wall Street rallied on Thursday and Treasury prices extended their gains following the data. Both bond markets and stock markets have been volatile since Federal Reserve Chairman Ben Bernanke said last week that the central bank could begin to wind down its bond purchases before the end of this year.
(Read More: Why All the Bond Selling Hysteria May Be Overdone)
"I think it makes the Fed even more confident that they're doing the right thing," said Drew Matus, senior U.S. economist and managing director at UBS. "And if you look at these numbers, they suggest that the second quarter's going to be better than the first quarter."
Positive China data also helped bolster sentiment. Industrial profits unexpectedly rose 15 percent in May year-on-year, defying expectations of a slowdown. Japan's Nikkei rallied nearly 3 percent, logging its biggest percentage gain in 13 sessions, while the Shanghai Composite index finished flat.
"Any China data carries significant weight these days as investors are desperate for signs that the world's second biggest economy is still ticking along," wrote Stan Shamu, market strategist at IG.
(Read More: Asia Rebounds Sharply as China, Fed Fears Ease)
In Europe, German unemployment data came in slightly better than expected, falling 6.8 percent in June. However, the total unemployment number remained a seasonally adjusted 2.9 million.
Other data showed that euro zone businesses and consumers are becoming slightly more optimistic about the region's economic outlook. The European Commission said on Thursday that its economic sentiment had ticked higher to 91.3, from last month's revised figure of 89.5. However, data from France showed that consumer confidence there had fallen to an all-time Low.
After a seven-hour meeting, finance ministers from the EU agreed to a deal on future bank bailouts, and who is liable to pay for them. According to the new rules, shareholders, bondholders and depositors with more than 100,000 euros ($132,000) could be forced to help bail out troubled banks.
"If the banks get into trouble, we will now, throughout Europe, have one set of rules on who pays the bill," Dutch Finance Minister Jeroen Dijsselbloem told CNBC.
(Read More: EU Strikes Deal on Who Will Pay for Bank Bailouts)
Subsea Shares Take a Plunge
Shares of oil services firm Subsea plummeted to close around 13.50 percent lower on Thursday, after it announced a project in Brazil had run into more delays.
However, shares of Greene King rose by up to 4.15 percent after the brewer posted an increase in full-year profits. Plus, shares of Bankia closed around 1.40 percent higher after the troubled Spanish bank raised 167 million euros ($218 million) by selling a stake in airline IAG (International Airlines Group).