London - European shares rose sharply on Thursday, tracking strong gains on Wall Street and ahead of a European Central Bank meeting that investors expect will deliver a boost to markets following recent turmoil.
The market was led higher by British low-cost airline easyJet, which jumped 6.4 percent after raising its full-year profit outlook.
At 08h05 GMT, the FTSEurofirst 300 index of top European shares was up 1.5 percent at 1,416.95 points after volatile trading in the past weeks.
The index is still down more than 10 percent from its peak about a month ago due to a turmoil in the Chinese stock market and concerns of an imminent US rate hike. However, the market has partially recovered on hopes that central banks will continue to be supportive.
“We are expecting some dovish newsflow from the ECB meeting. Focus will be on stressing that the ECB stands ready to act,” Robert Parkes, equity strategist at HSBC, said. “We also don't believe that the Fed will raise rates in September.”
“We believe that we are still in a 'buy on the dips' market, with double-digit earnings growth and supportive monetary policies supporting stock prices.”
The ECB is set to cut its inflation forecasts because of falling oil prices and China's economic slowdown, and will probably promise to beef up its bond-buying programme if prospects weaken further. It is expected to leave rates unchanged.
Investors will keep a close eye on Friday's US jobs data, which could provide clues about the timing of the Federal Reserve's likely move to raise interest rates.
Some traders said that Friday's non-farm payrolls data could also come below expectations after the ADP National Employment Report showed in the previous session that US private employers added a smaller than expected 190 000 jobs in August.
EDF dropped 4 percent, top faller in the FTSEurofirst 300 index, after the French state-controlled utility said the EPR nuclear reactor it is building in Normandy will again be delayed to 2018. It raised the cost estimate to 10.5 billion euros ($11.85 billion) from an initial budget of 3 billion euros.
REUTERS