European markets rebound as Chinese data fuels rally

European stock indices rose on Thursday, erasing losses from the recent Trump-led selloffs. The pan-European Stoxx 600 gained 0.62%, the DAX increased by 1.7%, and the CAC 40 climbed by 0.76%.

The FTSE 100, however, ended slightly lower after the Bank of England (BoE) cut its policy rate by 0.25%. Investors appeared to reassess the impact of the US election, choosing to look beyond potential tariffs for now, as the re-elected US President refrains from clarifying policies.

Surprisingly robust Chinese trade data bolstered optimism regarding the country's economic outlook, which is expected to enhance consumer demand in Europe's key export market. China's exports rose by 12.7% in October, marking the highest increase in 19 months, which also led to a surge in Chinese stock markets on Thursday. 

Meanwhile, market participants seem to have largely dismissed concerns over German political instability after Chancellor Olaf Scholz dismissed Finance Minister Christian Lindner, effectively ending the coalition government on Wednesday.

Scholz resisted opposition calls for an early snap election in January, leaving his Social Democratic Party in a politically challenging situation. Market reactions have been relatively muted, suggesting that economic fundamentals and broader European performance continue to weigh more significantly on investor sentiment than domestic German political shifts.

Most sectors in the Euro Stoxx 600 index recorded gains on Thursday, with China-demand-sensitive sectors, including luxury consumer stocks, automobiles, and mining shares, leading the upward momentum.

Prominent European luxury fashion brands, including LVMH, Hermès, and Kering, all rose between 2-3%. Automotive shares, such as Porsche,