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Investors welcome bright earnings data

European stocks rose on Thursday as better-than-expected corporate earnings offset worries about rising cases of COVID-19 and a sharp escalation in tensions between the United States and China.

Shares rallied to their strongest levels since February this week - in many countries erasing their entire slump in March when the coronavirus pandemic sent markets into freefall - as investors bet that massive stimulus has carried economies through the worst of it.

The gains came despite Washington’s order to Beijing to close its consulate in Houston, Texas amid accusations against China of spying. These had weighed on risk sentiment earlier in Asia, initially pulling shares lower before Asian stocks rebounded.

Positive corporate earnings surprises in Europe helped the mood, including from Unilever, French-Italian chipmaker STMicroelectronics and automaker Daimler.

Despite the virus being far from under control, analysts say unprecedented stimulus measures to boost battered economies continue to provide structural support for riskier assets.

The dollar was down marginally against a basket of currencies and unchanged versus the Japanese yen.