European shares closed at their highest level in seven weeks on Thursday 29 October 2026, as strong company results helped markets look past an unchanged interest-rate decision and fresh uncertainty over the leadership of the European Central Bank.

The pan-European STOXX 600 index ended 0.77% higher at 649.11 points, its best close since 8 September. The gain stood in contrast to weaker trading in the United States and Asia on the same day, where results from Alphabet and Samsung Electronics revived concerns about returns on artificial-intelligence spending.

The European Central Bank left interest rates unchanged, but warned that high energy costs were adding to inflation risks and left open the possibility of a rise in December. Capital Economics chief Europe economist Andrew Kenningham was quoted as expecting just one more increase, in December, on the view that second-round price effects would remain largely absent. Markets were also weighing President Christine Lagarde's decision to step down, which has started speculation about her successor.

Earnings led the advance

Energy shares led the rise. Shell touched a record high after reporting its strongest quarterly profit since 2022 and increasing its share buybacks. France's TotalEnergies added 1.2% after third-quarter profits more than doubled to $9.1 billion, supported by tighter global supplies of oil products following the US-Israeli war with Iran.

Airbus climbed 2.3% after keeping its full-year forecasts and production plans. Semiconductor equipment maker Aixtron rose 8.5% after a jump in third-quarter revenue, while Renault Group jumped about 7% after a stronger-than-expected rise in third-quarter revenue.

Banks lagged behind

Not every sector shared in the advance. Banking stocks fell 0.2% as a group, after Spanish lender BBVA dropped 2.6% following mixed third-quarter earnings. Eurozone government bond yields have also surged in recent weeks, pushing up borrowing costs for households and businesses, with French yields particularly affected by debt and political uncertainty. The December rate meeting and the question of Lagarde's replacement will test whether the rally can hold.

Sources: Reuters via LSE; BigGo Finance.