French stocks were moving higher on Thursday on optimism about a U.S.-China trade deal after U.S. President Donald Trump said that a partial trade agreement would be signed in the middle of next month.
In what could be a major milestone in a bilateral trade war, Trump also said that he would later travel to Beijing to begin talks on the next phase of the agreement.
Meanwhile, China's central bank announced fresh stimulus for the country's stuttering economy.
The People's Bank of China said it would cut banks' reserve requirement ratio by 50 basis points on Jan. 6, freeing up more than USD 100 billion for loans to small businesses.
The benchmark CAC 40 was up 63 points, or 1.05 percent, at 6,041 as traders returned to their desks after a public holiday on Wednesday for the New Year.
Airbus shares rallied 3.3 percent on a Reuters report that the company has become the world's largest planemaker for the first time since 2011.
The euro held steady against its rivals after the release of Eurozone final manufacturing PMI data.