[BENGALURU] European stocks rose on Thursday (Oct 14), hitting the highest in more than two weeks as investors bet a steady economic recovery from the pandemic-induced slump will support corporate earnings despite signs of elevated inflation.

Mining shares jumped 3.3 per cent, their biggest daily gain in three months, technology stocks rallied again and the pan-European STOXX 600 index rose 1.2 per cent.

European chipmakers, including ASML, Infineon and BE Semiconductor, were among the top gainers in the tech sector after Taiwan chip giant TSMC posted a 13.8 per cent jump in third-quarter profit due to booming demand for semiconductors.

China's factory gate inflation rose in September to a record high on soaring commodity prices. Many still hope inflation will be transitory, but supply chain disruptions, a global energy crisis and labour shortages have fuelled concerns that central banks could raise interest rates sooner, accelerating plans for a gradual exit from the pandemic-era stimulus.

"Equity markets appear to have shaken off their caution of recent weeks," said Chris Beauchamp, chief market analyst at IG.

Upbeat results from Wall Street banks, big European names such as LVMH and SAP, as well as TSMC reinforced the view of a global economy still moving in the right direction, albeit at a slower place, he said.

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"Having dropped back in an orderly fashion into earnings season, it seems stock markets have now reached a level at which investors are once again happy about buying the dip."

Optimism around the earnings has seen the STOXX 600 narrow the gap to its all-time highs to 2 per cent.

Analysts expect third-quarter profit for STOXX 600 companies to climb 46.7 per cent from a year ago, according to Refinitiv IBES data, with energy companies enjoying the biggest revisions.

The biggest drag on the STOXX 600 was AstraZeneca, down 0.5 per cent. Europe's drug regulator said it had started a real-time review of the drugmaker's antibody-based Covid-19 therapy.

REUTERS