European shares rise on trade optimism, Germany up 1pc

German shares logged their best day in six weeks, leading the charge among European shares, as sentiment was lifted by signs of progress in U.S.-China trade relations a day ahead of high-level talks between the two parties.

Reports that China was still open to agreeing to a partial trade deal with the United States, and that Beijing was offering to increase its annual purchases of U.S. agricultural products, came as signs of compromise, but analysts remain skeptical.

"At first glance, recent news provides at least some reason to be a bit more optimistic about the U.S.-China trade talks," wrote Raoul Leering, head of international trade analysis at ING in a note.

"But there's scant evidence that the two sides are willing to change their positions enough to break out of the current deadlock." Exporter-heavy German shares .GDAXI added 1% and the pan-European STOXX 600 index rose 0.4% recovering from Tuesday's 1% decline when hostility from both sides in the U.S.-China dispute dented sentiment.

A year into it, headlines from the trade war continue to inject volatility into markets, with STOXX 600 index giving up as much as it gains, putting it on course changed week.

Trade-reliant sectors such as technology stocks .SX8P, auto and part makers . SXAP and some luxury goods stocks were among the biggest boosts to the index.

Among the top performers was the owner of British gambling firm Ladbrokes, GVC Holdings Plc (GVC.L), which gained 5.1% after it raised its annual core earnings forecast for the second time in three months. Along with a rally in Ryanair ( RYA. I) and easyJet ( EZJ. L) after a day of steep falls, it lifted last session's worst performing travel and leisure sector . SXTP 0.5%.

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