German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, October 22, 2025. REUTERS/staff

By Sukriti Gupta

(Reuters) -European shares edged higher on Thursday helped by gains in heavyweight energy stocks after the U.S. imposed new sanctions on Russia and strong corporate earnings, while the U.S.-China trade frictions capped gains.

The continent-wide STOXX 600 index edged up 0.2% at 573.32 points, as of 0858 GMT. Other major regional indexes also nudged higher except Germany's DAX and Spain's IBEX that fell 0.3% and 0.2%, respectively.

The U.S. is considering curbs on a wide array of software-powered exports to China to retaliate against Beijing's latest round of rare earth export restrictions. U.S. President Donald Trump and his Chinese counterpart could meet in South Korea later this month.

Nick Saunders, CEO of online investment platform Webull UK, said concern over increased tariffs on China and the renewal of the trade war is weighing on the market.

"It's just there are some bright spots (such as) the commodity stocks and defence stocks that are really sort of holding the markets up this morning," said Saunders.

U.S. Treasury Secretary Bessent is expected to meet with Chinese Vice Premier He Lifeng in Malaysia this week.

Meanwhile, the U.S. hit Russia's major oil companies with sanctions over the Ukraine war on Wednesday. EU countries on Thursday formally adopted a 19th package of sanctions against Russia.

European energy stocks rose 2.5%, tracking a surge in oil prices following the sanctions.

BP and Shell added about 3% each, while Aker BP rose 3.9% and Equinor added 4.5%.

The STOXX aerospace & defence index gained 0.8%, while the luxury index added 1.6%.

The travel and leisure sector declined 1.9% while technology stocks lost 0.9%.

Among corporate updates, Nokia jumped 9.3% after reporting third-quarter profit well ahead of expectations.

Kering's overall group sales fell less than analysts expected in the third quarter. Shares of the French luxury group rose 8.5%.

Rentokil Initial jumped 10.9%, to top the STOXX 600, after reporting a 3.4% rise in third-quarter organic revenue.

BE Semiconductor rose 2% after the chipmaking equipment supplier posted a quarterly operating profit beat.

On the flip side, SAP fell 2.5% after the German software maker reported third-quarter results.

Dassault Systemes fell 16.3%, to the bottom of STOXX 600, after the French software company cut its full-year revenue growth guidance and published third-quarter results below consensus.

Sodexo declined 7% after the caterer forecast slower revenue growth in 2026 than in 2025.

(Reporting by Sukriti Gupta in Bengaluru; Editing by Harikrishnan Nair)