LONDON: Most European stock markets and the euro rose on Thursday, extending a slight recovery after a rout at the start of the week caused by Italy's political upheaval.
Around 1000 GMT, London's benchmark FTSE 100 index was up 0.2 percent compared with the close on Wednesday.
In the eurozone, Frankfurt's DAX 30 fell 0.4 percent and the Paris CAC 40 climbed 0.2 percent.
Milan's FTSE MIB rose 0.8 percent.
The euro climbed above $1.17, as inflation in the eurozone leaped to the ECB's target in May, fuelled by a huge increase in oil prices as the US decided to pull out of a nuclear deal with Iran.
Asian equities earlier Thursday bounced back from the previous day's mauling as fears of turmoil in Italy were soothed by conciliatory noises from the country's two biggest populist parties.
"Fears over an Italian snap election have receded," noted Joshua Mahony, market analyst at IG traders.
The news provided relief to global markets beginning Wednesday after they were sent spinning by the crisis in Italy -- the eurozone's third biggest economy -- which many feared could lead to fresh elections that could essentially become a referendum on euro membership.
The gains continued into Asia on Thursday, with Tokyo ending 0.8 percent higher, while Sydney added 0.5 percent, Singapore climbed 0.3 percent and Seoul put on 0.6 percent.
Hong Kong added 1.4 percent and Shanghai finished up 1.8 percent, supported by data indicating a bigger-than-expected rise in Chinese factory activity in April. Wellington, Kuala Lumpur and Taipei were also comfortably higher.
- Volatility warning -
Oil prices were down but holding up after they also rallied Wednesday in response to a report that said OPEC would likely lift output gradually, soothing concerns about a new supply glut.
Crude markets have been hammered since OPEC kingpin Saudi Arabia and Russia last week indicated they could lift a cap on production, which has supported prices for two years, as an oversupply crisis eases.
Investors are now looking forward to the release Friday of key US jobs figures, which could provide some idea about the Federal Reserve's plans for raising interest rates.
Payrolls firm ADP estimated US private sector job growth at 178,000 in May, down from 204,000 in April and slightly below analysts' expectations.
However, while sentiment is positive, analysts warned that ongoing geopolitical issues and the unresolved China-US trade row continue to dog trading floors.
"We are going to be filled with tremendous uncertainty over the course of the summer," David Ader, chief macro strategist at Informa Financial Intelligence, told Bloomberg Television.
"If you look at things like the various economic surprise indices out there they have been slowing down, but on the other hand you still have a Fed hike coming in June. I see a lot of uncertainty, which results in a lot of volatility."
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