STOCK markets bounced back from doldrums as bargain-hunting investors snapped up cheap shares that were knocked by trade war fears a day earlier.

The FTSE 100 ended the day up nearly 0.8 per cent or 59.37 points at 7,651.33 points, after tumbling 2.3% on Wednesday.

Across Europe, the French Cac 40 and German Dax rose nearly 1% and 0.6% respectively.

David Madden, a market analyst at CMC Markets UK, said: "Stocks are in positive territory as some of the fears surrounding a trade war have subsided.

"Bargain hunters have been busy following the surprise news yesterday that the US is planning to slap tariffs on $200 billion worth of Chinese goods.

"Markets are calmer today, and some fresh buyers have entered the fold."

Sterling edged into positive territory to trade higher by 0.14% against the US dollar at 1.322, and rose 0.05% versus the euro at 1.131.

Brent crude prices slipped 0.9% to $73.44 per barrel as Libyan oil exports started coming back online following nearly two weeks of closures for some oil fields.

In UK stocks, Sky shares jumped 51p to 1,545p after Rupert Murdoch's 21st Century Fox was given the Government's all-clear to take over Sky.

Newly appointed Culture Secretary Jeremy Wright said he agreed with his predecessor's final decision to accept Fox's planned sale of Sky News to Disney should it succeed in buying Sky - a move clearing the final regulatory hurdle for Fox.

However, the broadcaster will still have to see off rival suitor Comcast which has upped its bid for Sky.

ASOS plunged 680p to 5,820p as the online fashion retailer warned that its full-year growth will be at the "lower end" of market expectations.

That is despite logging a 22% rise in group revenues to £823.9 million in the four months to June 30.

Shares in Dart Group - the group behind airline Jet2 - surged 259p to 999.5p after pre-tax profits jumped 49% to £134.6m in the year ended March 31, while revenues increased 38%.

Dunelm shares staged a minor recovery to end the day up 1p at 485.4p, having taken a hit in morning trading.

The home furnishings group's sales were down 1.4% in the 13 weeks to June 30, with total revenue coming in at £236.5m for the period.

Sofa chain DFS rose 1.4p to 200p despite warning over full-year earnings after the recent heatwave dented sales and shipments of made-to-order products from the Far East were hit by delays.

DFS said total like-for-like sales in the core business were about 3% lower in the 23 weeks to July 7 and around 4% lower in the 49 weeks of the year so far.

Full-year underlying earnings were now expected to be lower than the £82.4m reported the previous year.

B&M rose 9.3p to 423.7p as it reported a solid start to the financial year, with revenues growing 21.3% for the period between April 1 and June 30, rising from £656.3m to £796.3m.

Its chief executive Simon Arora said the business had performed strongly despite a "sluggish market environment".

The biggest risers on the FTSE 100 were Astrazeneca up 184p to 5,434p, Sky up 51p to 1,545p, Micro Focus International up 37.5p at 1,221.5p, and Compass Group up 50p at 1,649p.

The biggest fallers on the FTSE 100 were Ocado Group down 28.5p at 1,018p, BT Group down 4.2p to 223.65p, Smurfit Kappa Group down 34p at 3,130p, and ITV down 1.85p at 175.6p.