European shares ride trade relief rally

By Helen Reid and Julien Ponthus

LONDON (Reuters) - European shares surfed a worldwide rise in stock markets on Thursday as fading concerns about the trade war between the United States and China lifted investors into a risk taking mood.

The pan-European STOXX 600 <.STOXX> closed up 0.7 percent while the leading euro zone stock index <.STOXX50E> scored its ninth straight session of gains, up 1.1 percent, its best performance in two months.

A positive open on Wall Street where the Dow Industrial Average reached a record high helped European indexes accelerate even if "these gains are merely side orders compared with the ongoing wealth creation seen in U.S. stocks", IG analyst Chris Beauchamp said.

Autos <.SXAP>, banking <.SX7P> and mining <.SXPP> sectors led gains as investors stayed resolutely focused on hopes that the latest shots in the trade war could drive the dispute toward resolution.

Autos gained 1.8 percent, also helped by Kepler Cheuvreux upgrading its recommendation on the sector.

"On autos, valuations have reached historically low levels, pricing in a lot of bad news already," wrote Kepler Cheurvreux strategists.

Shares in Belgian telecoms company Proximus (NASDAQ: PROX) climbed 2.5 percent, with traders saying Citi had upgraded its recommendation on the stock.

Lower levels of market volatility, meanwhile, hurt quarterly revenue at trading platform IG Group , sending the stock down 9.8 percent to the bottom of the STOXX.

Belgian biotech firm Argenx (NASDAQ: ARGX) fell 4.6 percent in a second day of losses after a share offering.

On the small-cap front, German fashion retailer Tom Tailor issued a profit warning, sending its shares down 12 percent. The firm blamed Europe's exceptionally hot and long summer for slower growth.

Markets have shrugged off an escalation on Tuesday of the tariff war between the United States and China, focusing rather on the tariff levels being lower than expected and on hopes that the dispute may be nearing an end.

"Financial markets are likely to focus on the potential for an agreement between U.S. and Chinese officials that could reverse these tariffs," wrote Goldman Sachs analysts.

(Reporting by Helen Reid; Editing by Keith Weir)

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