European stock markets finished in the green on Thursday, buoyed by U.S. economic indicators suggesting a forthcoming interest rate cut, even though political uncertainty remains in Europe with British elections and the second round of French parliamentary elections just days away.

In Paris, the CAC 40 advanced 0.83% to 7,695.78 points, while Germany's Dax gained 0.43% and the UK's Footsie 0.86% ahead of the UK general election on Thursday.

The EuroStoxx 50 index ended the session up 0.47%, compared with 0.57% for the FTSEurofirst 300 and 0.59% for the Stoxx 600.

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The markets have digested the numerous macroeconomic and monetary policy data published in recent days.

In the US, new jobless claims, private job creation figures and the ISM services indicator all came in below expectations, raising hopes that the US economy is finally beginning to cool down under the impact of rate hikes.

At the same time, the minutes of the Fed's last meeting showed that inflation was starting to ease.

By contrast, the "minutes" of the ECB's latest meeting suggest that several European monetary policymakers are concerned about persistent inflation.

"These 'minutes' clearly show that the rate cut decided in June is not necessarily the first in a series", note ING analysts.

The results of the elections in the UK, where polls close at 22:00 (21:00 GMT), will be closely watched, even if there is little doubt as to the outcome, with the Labour Party expected to win.

Sunday's second round of parliamentary elections in France is likely to have a much greater impact on the markets, which are betting on a National Assembly without a party with an absolute majority, according to recent polls.

VALUES

French banks finished higher, as investors felt the risk of the Rassemblement National obtaining an absolute majority had receded. Société Générale gained 2.48%, Crédit Agricole 2.26% and BNP Paribas 1.9%. The European banking sector posted the best sector performance of the Stoxx, gaining 1.3%.

Pluxee lost 9.29% after publishing third-quarter results the previous day that fell slightly short of expectations, despite raising its growth forecasts for the rest of the year.

Eramet gained 3.85% after announcing a target capacity of 24,000 tons of battery-grade lithium by mid-2025 for its new lithium plant in Argentina.

Biomerieux advanced by 3.71% after Midcap raised its recommendation to "buy" from "hold".

Continental climbed 8.42% as several brokers said they were positive about future margins in the automotive and tire divisions.

Roche was down 1.06% after the company announced the interruption of a clinical trial for a new cancer drug.

Smith & Nephew gained 6.88% after Cevian Capital announced it had acquired around 5% of the pharmaceutical equipment group's capital.

RATES

European yields edged up, as several French debt auctions went off without a hitch on Thursday.

The German ten-year yield rose by 2.7 bp to 2.585%, while the two-year yield advanced by 2.9 bp to 2.943%.

The yield on the 10-year OAT rose to 3.281%, widening the gap slightly with the Bund, while the Franco-German spread hit a three-week low on Wednesday.

CURRENCIES

The dollar retreats as the latest data suggest a normalization of the US economy and reinforce expectations of interest rate cuts.

The dollar lost 0.28% against a basket of reference currencies, including the euro, which gained 0.23% to $1.0811.

Sterling climbed 0.15% to $1.2759. The detailed results of the British elections will be known on Friday morning.

OIL

Crude oil prices are hesitating, as markets are divided over the interpretation of the latest economic data suggesting a slowdown in activity capable of triggering rate cuts.

Brent crude gained 0.19% to $87.51 a barrel, while West Texas Intermediate (WTI) nibbled 0.08% to $83.95 a barrel.

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TO BE CONTINUED ON FRIDAY :

(Written by Corentin Chappron, edited by Blandine Hénault)