Frankfurt, Germany – European stock markets rose modestly on Thursday, driven by strong performance in industrial and automotive sectors, as investor risk appetite improved following two sessions of muted trading. The STOXX Europe 600 index advanced 0.1% to 576.94 points, marking its third consecutive session of gains.

Industrials Boost European Indexes

Industrial stocks saw the largest gains, climbing 0.8%, led by Schneider Electric and Siemens Energy, which rose 3% and 2.5%, respectively, after J.P. Morgan upgraded both companies to “Overweight” from “Neutral”. These industrial gains supported broader market lifts across Germany and France, with the DAX and CAC 40 up 0.6% and 0.2%, respectively.

Automakers Rally on Regulatory News

European automakers surged 1.8%, with Porsche and Mercedes-Benz jumping 3.7% and 5.1%, respectively, after U.S. President Donald Trump proposed cutting fuel economy standards, a move aimed at easing the sale of gasoline-powered vehicles. Market analysts noted that the regulatory shift could provide relief for the sector and improve profit outlooks for European car manufacturers.

“There’s finally a bit of good news for a sector that has struggled to make sustained headway… the loosening of regulation might just allow the sector a bit of breathing room,” said IG Chief Market Analyst Chris Beauchamp.

Technology Stocks Gain on Chip Production News

Technology shares increased 0.8%, fueled by news that Chinese chipmaker Cambricon plans to triple chip output to challenge Nvidia in China’s growing AI market. STMicroelectronics and Soitec were among top gainers, each rising more than 3%, reflecting strong investor sentiment in the semiconductor and AI sectors.

Mixed Corporate Updates

Investors reacted to corporate earnings and updates, with Societe Generale gaining 1.9% after Goldman Sachs upgraded the stock to “Buy”. Meanwhile, Philips plunged 6.6%, hitting the bottom of the STOXX 600 after traders expressed concerns over 2026 growth prospects. Shares of spirits companies Remy Cointreau and Diageo fell 2.7% and 1.2%, respectively, following UBS downgrades.

Market Sentiment and Outlook

Overall, the market optimism was underpinned by upbeat global investor sentiment, gains on Wall Street, and expectations of a U.S. Federal Reserve interest rate cut. Defensive sectors such as healthcare and consumer staples lagged behind, as investors favored more cyclical and growth-oriented stocks.

“It feels like a typical December performance chase, with investors moving from safe-haven assets toward more dynamic momentum plays,” added Beauchamp.