The pan-European Stoxx 600 ended up 0.4 per cent at 563.94 points

European shares closed higher on Thursday after AI bellwether Nvidia’s results quelled concerns around an AI bubble, but pared earlier gains as uncertainty over the US monetary policy path weighed on investor sentiment.

The pan-European Stoxx 600 ended up 0.4 per cent at 563.94 points. Other regional indexes also rose, with those in Germany and France up 0.5 and 0.3 per cent, respectively.

Chip designer Nvidia’s blowout quarterly results and positive outlook came at a crucial time for investors, who have been rattled in recent weeks by fears of an AI bubble.

What makes us excited about the tech sector and Nvidia is that the demand for AI is still bigger than the supply. So that kind of capex span that the market is somewhat worried about is still there, said Marija Veitmane, head of equity research at State Street Global Markets.

Nvidia results suggest that those earnings are likely to remain strong, very visible, and that’s a very strong support for the equity market, Veitmane added.

The European tech index pared earlier gains to rise 0.1 per cent.

We are seeing European tech stocks caught up in the overall enthusiasm for the tech trade, said Laura Cooper, head of macro credit at Nuveen.

AI equipment makers that have benefited from the technology boom, such as Siemens Energy, added 2.9 per cent.

Bank stocks gained 0.8 per cent and energy added 1.1 per cent.

European auto stocks shed 1.4 per cent. French car parts supplier Valeo dropped 13 per cent after it provided mid-term guidance below expectations. The media sector dropped 1.9 per cent.