The pan-European STOXX 600 index <.STOXX> ended up 0.9 percent, further supported late in the session by a fall in the euro after ECB President Mario Draghi reaffirmed a commitment to keep interest rates low through next summer.

Germany's exporter-heavy DAX <.GDAXI>, which has come under pressure due to uncertainty over global trade relations, rose 1.8 percent, its biggest one-day gain since early April.

The rally followed Wednesday's meeting between European Commission President Jean-Claude Juncker and Donald Trump, in which the U.S. president agreed to refrain from imposing tariffs on European cars while the two sides look to cut other trade barriers, easing the threat of a transatlantic trade war.

"Investors will be cautiously optimistic in respect of the announcement yesterday, but will also remember what happened with respect to China," Alastair George, investment strategist at Edison, said.

"Whether it's anything more than a temporary suspension of hostilities or the start of something more significant remains to be seen."

Earlier this month Washington threatened to impose tariffs on another $200 billion worth of Chinese imports, rapidly deteriorating relations with Beijing after signs earlier in the year that the two countries were set to negotiate a compromise.

European autos <.SXAP> were the biggest sectoral gainers, up 2.6 percent. The sector has been hit particularly hard, with tariff threats forcing carmakers on both sides of the Atlantic to cut their guidance.

Daimler rose 2.8 percent, overcoming initial weakness that followed second-quarter results showing its profit was hit by weaker pricing and tariffs.

On a busy day of earnings, a number of market heavyweights saw significant share price moves. British American Tobacco, Smith & Nephew, RELX and AstraZeneca all rose by between 2.1 percent and 5.1 percent after giving updates.

Airbus rose 4.5 percent to a fresh record high after the aerospace group's second-quarter core profit doubled.

Shares in French hygiene services company Elis shot up 12.7 percent, its best day ever after it reported first-half results and announced an acquisition.

Nokia tumbled 4.8 percent after reporting weak profits, while Kion fell 4.4 percent after results.

So far around a quarter of MSCI EMU companies have reported second-quarter results, and more than half of those have either met or beaten analysts' expectations, according to Thomson Reuters I/B/E/S data.

Earnings growth is clocking in at 0.3 percent, though the blended estimate, which combines actual and estimated earnings, stands at 1.3 percent.

(Reporting by Kit Rees; Editing by Susan Fenton and Jon Boyle)

By Kit Rees and Danilo Masoni