European stocks rallied on Thursday as a massive EU stimulus plan and fresh U.S. unemployment data offset concerns over rising U.S.-China tensions.
The pan-European Stoxx 600 closed up by 1.8% provisionally, with most sectors and bourses in the black. Chemicals was the best-performing sector, jumping 2.6%.
Investors are keeping an eye on developments in an escalating war of words between the U.S. and China, with trade, the coronavirus pandemic and now Hong Kong a focus in the dispute.
U.S. Secretary of State Mike Pompeo told Congress on Wednesday that Hong Kong was no longer autonomous from China, raising questions over the special administrative region's favorable trade relationship with the U.S. as well as opening up the possibility of sanctions on Chinese officials.
Pompeo's comments came following the proposal of a national security law from Beijing that has spurred protests in Hong Kong. The bill was approved by China's National People's Congress on Thursday, paving the way for its implementation.
Investors will be also following the latest coronavirus news after the U.S.' coronavirus death toll crossed 100,000. Dr. Anthony Fauci warned that states should not go "leapfrogging" over reopening guidelines.
On Wall Street, stocks rose for a third day as new unemployment figures signaled the worst of the economic damage from the coronavirus pandemic may be over.
The Labor Department said another 2.1 million Americans filed for unemployment benefits last week, slightly higher than estimates. But the pace of new filings has dropped from previous weeks.
Back in Europe, markets are reacting to the European Commission's unveiling on Wednesday of plans for a 750 billion euro ($826.5 billion) recovery fund as the region faces the worst economic crisis since the 1930s.
Shares of Cineworld continued to rally on Thursday, jumping almost 22% after the cinema chain received a liquidity boost from lenders ahead of plans to reopen in July.
Luxembourg-based office space provider IWG climbed over 15% after a share offering.
At the bottom of the European blue chip index, British luxury car and airplane engine manufacturer Rolls-Royce fell by around 8% after investor AKO Capital dumped its stake in the company at a discount.