European stocks rallied on Thursday, taking cues from Wall Street overnight after the Federal Reserve raised interest rates as expected but cooled aggressive tightening bets, with sentiment lifted further by a slew of upbeat earnings.

By 0709 GMT, the pan-European STOXX 600 index rose 1.8%, reversing much of the losses made so far this week.

Global stock markets jumped after the Fed raised interest rates by a widely expected 50 basis points, but Chair Jerome Powell explicitly ruled out 75 basis point hike in a coming meeting.

Battered technology stocks rose 3.2%, the most among European sectors, followed by automakers and industrial stocks.

Airbus jumped 7.1% after reporting a higher-than-expected first-quarter profit and as the planemaker firmed up record plans for a 50% hike in key narrowbody jet output.

Oil giant Shell jumped 2.9% after reporting a record first-quarter profit of $9.13 billion, boosted by higher oil and gas prices and a strong performance of its trading division.

BMW gained 2.9% as it posted a rise in quarterly profit, lifted by a reevaluation of the German carmaker's stake in its Chinese joint venture and strong pricing.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)