European shares hit over 1-month high ahead of services, retail sales data

European shares rose on Thursday amid signs of a global economic recovery and hopes of more stimulus measures, with eyes on local service-sector and retail sales data that is likely to show sustained growth. The pan-European STOXX 600 index rose 1%, tracking a strong session in Asia after a survey showed activity in China's service sector grew for a fourth straight month in August.

European shares rose on Thursday amid signs of a global economic recovery and hopes of more stimulus measures, with eyes on local service-sector and retail sales data that is likely to show sustained growth.

The pan-European STOXX 600 index rose 1%, tracking a strong session in Asia after a survey showed activity in China's service sector grew for a fourth straight month in August. Travel and leisure stocks led gains across Europe on hopes of a COVID-19 vaccine, while bank stocks bounced back after three straight sessions of losses.

French drugmaker Sanofi and its British peer GSK rose after they announced starting of a clinical trial for a protein-based COVID-19 vaccine candidate. While the STOXX 600 hit a more than one-month high, it still stayed within a trading range seen since early-June. The index needs to close at least 15 points higher to break out of the range.

Data from the euro zone is expected to show service-sector growth for a second straight month across the bloc. But activity in Spain and Italy contracted in August after the countries introduced new curbs in the wake of increased COVID-19 cases.

A separate reading is expected to show a continued uptrend in euro zone retail sales over July, after volumes were seen returning to pre-pandemic levels in June. "Retail sales should capture the strongest part of the economic bounce-back. Consumers have emerged from the lockdown with money to spend and a desire to spend it," Paul Donovan, Chief Economist at UBS Global Wealth Management wrote in a note.

"Trade data suggests that they are spending on things, not services. Retail sales may underreport this, given structural shifts in consumption patterns." In corporate news, Germany's Siemens Healthineers fell 4.5% after it issued 2.73 billion euros ($3.22 billion) worth of new shares to help finance its planned takeover of U.S. peer Varian.

French consulting and IT services provider Capgemini rose 2.5% after it said it expected double-digit revenue growth in 2020 driven by a gradual second-half recovery.