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European stocks gain ahead of Bank of England rate decision; German DAX hits 6-week high

Elliot Smith

European stocks traded sharply higher Thursday morning as investors await an interest rate decision from the Bank of England.

The pan-European Stoxx 600 jumped 0.7% in early trade, oil and gas stocks leading gains with a 1.6% rise as all sectors except travel and leisure traded in positive territory. Autos, chemicals and technology stocks all rose more than 1.3%. Germany's DAX hit a six-week high, rising 1% after the bell.

The week's focus on central banks continued Thursday, with the Bank of England due to announce its June policy decision at noon BST. Economists polled by Reuters are expecting a unanimous vote to hold rates at 0.75%, despite two officials recently mooting the need for higher borrowing costs in the near future.

European Central Bank President Mario Draghi touted another round of stimulus on Tuesday, while Wednesday saw the U.S. Federal Reserve signal a rate cut later this year.

Shares in Asia traded higher Thursday afternoon after the Fed opened the door to cuts, with mainland Chinese indexes all rising more than 2%. Hopes for a trade deal between the U.S. and China have also risen this week as U.S. President Donald Trump and Chinese President Xi Jinping prepare to meet at next week's G-20 summit.

Meanwhile Huawei CEO Ren Zhengfei told CNBC exclusively Wednesday that the banks in the U.S. legal case against the company knew what was happening. Huawei and his daughter, CFO Meng Wanzhou, were charged with bank and wire fraud and conspiracy to commit bank and wire fraud in relation to skirting American sanctions on Iran.

Back in the U.K., Conservative party Members of Parliament (MPs) are expected to decide the final two candidates to succeed Prime Minister Theresa May, with former Foreign Secretary Boris Johnson the clear favorite.

In corporate news, Airbus has been sealing deals with big buyers for its latest passenger jet at the Paris Air Show, following a surprise order by British Airways' owner for rival Boeing's grounded 737 Max jet.

Meanwhile the New York Times reported Wednesday that Deutsche Bank faces another anti-money laundering investigation, this time from U.S. federal authorities. Shares of Deutsche Bank traded slightly lower on the news.

In terms of individual stocks, shares of German food delivery company Delivery Hero soared 11.4% Thursday morning, topping the European blue chip index on the back of the company raising its full-year revenue guidance again. Other delivery services also gained on the news.

At the other end of the Stoxx 600, Russian steelmaker Evraz fell 5% after its shareholders completed the sale of a 1.7% stake.