A graph of the German share price index DAX is displayed at the stock exchange in Frankfurt, Germany, December 3, 2025. REUTERS/Staff

By Anastasiia Kozlova and Purvi Agarwal

Dec 4 (Reuters) - European shares inched up on Thursday with industrials and automakers leading broader gains, as risk appetite improved after two sessions of muted trading, while investors parsed through a mixed bag of corporate updates.

The pan-European STOXX 600 advanced 0.1% to 576.94 points by 0924 GMT, set for its third consecutive session of gains.

Industrial stocks rose 0.8%, the biggest boosts to the index. Schneider Electric and Siemens Energy gained 3% and 2.5%, respectively, after J.P.Morgan upgraded its rating to "Overweight" from "Neutral" on both the companies.

The stocks helped gains in major regional indexes, with ones in Germany and France were up 0.6% and 0.2%, respectively.

Automakers gained 1.8%, with Porsche and Mercedes-Benz adding 3.7% and 5.1% respectively, after U.S. President Donald Trump on Wednesday proposed slashing fuel economy standards, in a push to make it easier for automakers to sell gasoline-powered cars.

"There's finally a bit of good news for a sector that has struggled to make sustained headway in terms of real upside for quite some time... the loosening of regulation might just allow the sector a bit of breathing room," IG Chief Market Analyst Chris Beauchamp said.

Technology stocks added 0.8%, with STMicroelectronics and Soitec climbing more than 3% each.

Traders cited reports that Chinese chipmaker Cambricon planned to triple chip output to replace Nvidia in China's artificial intelligence market, which boosted the sector's outlook.

Largely upbeat global investor sentiment, driven by gains on Wall Street overnight, after weaker economic data kept bets on an interest rate cut by the Federal Reserve next week intact, also led to gains.

Optimism about U.S. rate cuts has been a major driver of global markets in recent weeks.

"It does feel like the general December move where you have a bit of a performance chase into the year end and a lot of the safe-haven stuff is being somewhat discarded in favour of more exciting momentum plays," said Beauchamp.

Sectors considered traditionally defensive, such as healthcare and consumer staples, lagged peers.

Among other stocks, Societe Generale gained 1.9% after Goldman Sachs upgraded the stock to "Buy" from "Neutral".

Philips plunged to the bottom of the index, down 6.6%, after traders flagged concerns about 2026 growth expectations following comments from the Dutch health technology company at a conference.

Shares of some spirit makers also fell, with Remy Cointreau and Diageo down 2.7% and 1.2% respectively, after UBS downgraded its rating on the stocks.

(Reporting by Anastasiia Kozlova and Purvi Agarwal; Editing by Rashmi Aich)