Trade-sensitive commodity-linked stocks <.SXPP> and autos <.SXAP> led the charge, surging more than 2% each, while upscale retailers also rallied and banks <.SX7P> posted their best day in a month.

Investors took heart after U.S. President Donald Trump tweeted he would meet Chinese Vice Premier Liu He on Friday for further trade talks, confirming the Chinese delegation would not be cutting the two-day negotiations short.

"The gulf between the two sides is wide, but a willingness to sit down and negotiate has injected some hope into the markets," said David Madden, a market analyst at CMC Markets UK.

The pan-regional STOXX 600 index <.STOXX> closed up 0.7%. Louis Vuitton owner LVMH's 5.6% jump on strong sales was the biggest boost to the index and lifted stocks across the luxury goods sector.

Gucci-owner Kering, Burberry, Christian Dior and Moncler climbed between 0.7% and 4.2%, with the Paris listed names pushing the French index <.FCHI> to its best day in six-weeks.

The latest trade comments fueled optimism that had been dulled after China urged the United States to stop unreasonable pressure on Chinese companies. The South China Morning Post also reported that the two sides made no progress in deputy-level trade talks earlier in the week.

Without significant progress, the next round of U.S. tariff hikes on $250 billion worth of Chinese goods will take effect on Oct. 15.

Frankfurt's export reliant DAX <.GDAXI> rose 0.6%, reversing losses posted after data showed a steeper-than-expected fall in Germany's August exports.

London's FTSE 100 climbed 0.3%, despite a rallying pound, after the UK and Irish Prime Minsters said they saw a pathway to a possible Brexit deal after a last-ditch meeting aimed at finding a way for the United Kingdom to leave the European Union in an orderly way. [GBP/]

There was a clear move out of defensives with utilities <.SX6P> and food and beverages <.SX3P> both losing around 0.4%, while a batch of bad news for healthcare companies hurt the healthcare index <.SXDP>.

Danish biosciences company Chr. Hansen hit its lowest level in a year and a half, sliding to the bottom of the STOXX 600 index after saying next year's organic sales growth would fall short of long-term guidance.

Health technology company Philips lost 8.8% after the firm said it would miss its 2019 target for profit margin improvement.

(Reporting by Medha Singh and Susan Mathew in Bengaluru; Editing by Patrick Graham and Kirsten Donovan)

By Susan Mathew