European benchmarks held gains throughout much of Thursday as the nascent wave of optimism bedded down across continental markets.

The continued move has been supported by dissipating political tensions and brighter economic outlook, which was underlined this week when U.K. unemployment hit a 40-year low and the French President pledged tax cuts in the current year. A more confident and optimistic Janet Yellen, testifying in Washington since Wednesday, has also been a factor for investors.

London's FTSE 100 was the only market in the red during late noon trading, off 0.05% at 7,411, while the CAC 40 was 0.24% higher at 5,234 in Paris. The DAX was 0.02% higher at 12,627 and major markets in Southern Europe were all in positive territory. 

The blue chip FTSE 100 was held back in London by losses at Astrazeneca (AZN) after reports suggested that CEO Pascal Soriot is set to depart and take the helm at Israel's Teva (TEVA) . The shares were down more than 4% during afternoon trading. 

However, house builder Taylor Wimpey, grocer Marks & Spencer and luxury retailer Burberry (BURBY) were all big gainers after rising more than 3% during the session. Lloyds Banking Group (LYG) and RBS (RBS) were also higher. 

In Paris, tax cuts and the prospect of meaningful deregulation under the new regime helped to push stocks higher once again, with Orange (ORAN) , Bouygues (BOUYF) , ArcelorMittal (MT) and BNP Paribas (BNPQY) leading the CAC 40 higher. 

In Frankfurt, Commerzbank (CRZBY) and Lufthansa (DLAKY) topped the DAX index with gains of around 2% and 1%, respectively. However, these were tempered by losses at Daimler (DDAIF) and a handful of other firms. 

Daimler fell Thursday after a report about the latest emission from the Stuttgart prosecutor's office suggested it is under investigation over the alleged use of so called defeat devices in some of its engines.

German daily Sueddeutsche Zeitung cited a search warrant when it reported late Wednesday that the Mercedes-Benz maker is alleged to have used so called defeat devices in more than a million of its cars.

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