The pan-Europe STOXX 600 index rose 0.5%, its highest level since Feb. 16, 2022. France's CAC 40 added 0.9% to lead gains among its regional peers.

Planemaker Airbus gained 3.2%, boosting both indexes, while opioid addiction treatment maker Indivior tumbled 11.2% to lead losses on the main European index after it reported an annual operating loss.

Airbus targeted 2023 jet deliveries, in line with its original estimate for last year, but slowed the production ramp-up of its best-selling A320neo jets.

Positive sentiment also spilled over from Asian markets as investors choose to cheer strong U.S. retail sales data as good news for earnings rather than worry about it being likely to support interest rate rises. [MKTS/GLOB]

All eyes will now be on European Central Bank speakers through the day, with board member Fabio Panetta backing the case for raising interest rates in smaller increments and avoid committing to future moves as inflation in the euro zone falls.

"U.S. data support a soft (or no) landing scenario," said Rainer Guntermann, rates strategist at Commerzbank, but warned that the ECB terminal rate pricing continues to flirt with new highs.

Rate-sensitive technology shares added 0.6%, with Dutch chip equipment maker ASML Holding delivering the biggest boost.

European miners rose 0.9% as copper prices in London rebounded from five-week lows amid hopes for a demand recovery in top consumer China. [MET/L]

The STOXX 600 has had a positive start to the year following a battering in 2022, boosted by hopes that the euro zone will narrowly avoid a recession, a recovery in China demand and upbeat earnings.

BIG EARNINGS BOOST

Relx gained 3.1%, lifting European media stocks by 1.6%, as the company said it was using generative AI to supercharge its legal, health and science products and forecast strong growth in 2023.

Pernod Ricard gained 4.6% after the drinks maker delivered forecast-beating first-half profit and sales, while UK's Standard Chartered reported a 28% rise in annual pretax profit and unveiled a new $1 billion share buyback programme, pushing its shares 1.8% higher.

Germany's Commerzbank jumped 9.6% on better-than-expected quarterly net profit, while French telecoms company Orange rose 5% as it said it expects to bolster cash flows and increase shareholder returns by 2025.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Saumyadeb Chakrabarty and Sherry Jacob-Phillips)

By Shreyashi Sanyal