European stocks rose on Thursday after strong forecasts from AI darling Nvidia lifted global chipmakers, while surveys pointing to improving business activity in the euro zone prompted traders to scale back bets of interest rate cuts this year.

The pan-European STOXX 600 index was up 0.2%, with the tech index rising 1.4% to lead sectoral gains.

Shares of European semiconductor stocks including ASML , Infineon and ASM rose in the range of 1% to 3.6% after Nvidia forecast quarterly revenue above estimates, announced a stock split and raised its quarterly dividend by 150% on a post-split basis.

Wall Street's tech-heavy Nasdaq looked set for a strong open as Nvidia climbed 6.9% in premarket trading.

"While questions about the longevity of Nvidia's technical supremacy are being whispered in some corners of the market, the group has raised the bar again with the Blackwell Platform, the world's most powerful chip," said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

"Being at the forefront of the specialised end of this market is a highly enviable place to be, the big question, as ever, remains whether the current market valuation is a fair reflection of the remaining opportunity, or approaching dangerous territory."

The broader equities market, however, came under pressure after a preliminary survey showed euro zone business activity expanded at its fastest pace in a year this month, supported by buoyant demand for services.

The German 2-year yield hit its highest in six months after the data, as traders scaled back bets on the extent of rate cuts from the European Central Bank.

Traders were pricing in rate cuts of 57 basis points (bps) by the end of 2024, compared with 67 bps on Wednesday.

Rate-sensitive sectors such as utilities and real estate were the biggest laggards, with Britain's National Grid tumbling nearly 10% after it announced plans to raise about 7 billion pounds ($8.9 billion) through a fully underwritten rights issue.

UK's FTSE 100 slipped 0.3% after Prime Minister Rishi Sunak on Wednesday called a general election for July 4.

Shares of Embracer slid 8.9% after the Swedish games developer said its finance chief would step down for personal reasons, and also reported fourth-quarter operating profit in line with market expectations.

Swiss bank Julius Baer rose 3% as its assets under management rose 10% to 471 billion Swiss francs ($515 billion) in the first four months of the year. (Reporting by Sruthi Shankar in Bengaluru; Editing by Sherry Jacob-Phillips and Eileen Soreng)