A graph of the German share price index DAX is displayed at the stock exchange in Frankfurt, Germany, November 26, 2025. REUTERS/Staff

By Anastasiia Kozlova and Purvi Agarwal

(Reuters) -European shares were muted on Thursday, as investors took a breather after three consecutive sessions of gains on rising hopes of a U.S. interest rate cut next month, while Puma shares surged after a report of takeover interest.

The pan-European STOXX 600 was flat at 574.01 points by 0926 GMT. The index is trading around one-week highs.

Major regional bourses were mixed. London's FTSE 100 fell 0.2% a day after the autumn budget was announced. Germany's DAX was up 0.3%.

Puma surged 14.6% after a Bloomberg News report said Chinese sportswear maker Anta Sports Products is among the firms exploring a potential takeover of the German sportswear retailer.

European markets paused on Thursday, after rallying in the last three sessions, as investors drew comfort from some Fed officials advocating for a rate cut next month, supported by economic data pointing to weakness in the economy.

"We've seen a pretty decent rally back from the drop that we saw (recent global sell-off)...for markets, it takes a bit of time to find sort of a new narrative," said Joost van Leenders, senior investment strategist at Van Lanschot Kempen.

"It's a period of some consolidation after what we've seen."

Healthcare shares were the biggest drags on the index, down 0.4%, weighed by declines in heavyweights Novo Nordisk and Roche.

On the flip side, financial services stocks were the biggest gainer on the index, up 0.7%. Deutsche Bourse gained 3.6% after J.P. Morgan raised its rating on the stock to "overweight" from "neutral".

Foods and beverages stocks gained 0.3%, with Davide Campari and Pernod Ricard up 1.6% each. Peer Remy Cointreau jumped 4.3% after its new CEO said the French spirits group is confident it will return to growth in the second half of its fiscal year.

Progress on a Russia-Ukraine peace deal also contributed to the upbeat sentiment so far this week.

"It's more likely that we would see a ceasefire than a full peace... even so, there could be a bit of relief, and maybe that's what we've seen already," van Leenders said.

Still, the index is about 2% away from its record high hit earlier this month, as it struggles to recoup ground lost in the recent global sell-off stemming from concerns over tech valuations.

Markets in the U.S. are closed for the Thanksgiving holiday.

Among other stocks, London's Unite Group fell 4.6% to a more than ten-year low after the student accommodation developer warned of lower earnings in 2026.

(Reporting by Anastasiia Kozlova and Purvi Agarwal in Bengaluru; Editing by Mrigank Dhaniwala and Sonia Cheema)