Eurozone Stocks Rise Amid Easing Yields, Hot PPI Data Adds to ECB Uncertainty

European stocks rose on Thursday, ending a three-session losing streak, as government bond yields eased and dovish Fed commentary stabilized risk assets after last week's sell-off.

The pan-European STOXX 600 index gained 0.5% to 649.10, moving away from Wednesday's one-month low.

Germany's DAX and London's FTSE 100 rose 0.7%, while France's CAC 40 added 0.1%.

The increase in European stocks was accompanied by a decline in government bond yields, with Germany's 10-year Bund yield down 1.2% to 3.36%.

However, the rise in European stocks was tempered by a surge in eurozone producer prices, which increased 1.6% month-on-month and 35% above consensus estimates, driven largely by energy costs.

The hot PPI data adds to signs that disinflation is stalling ahead of next week's ECB meeting, with some economists now arguing that the central bank may have less room to ease than previously thought.