European shares clocked their best one-day gain on Friday as investors took comfort from easing euro zone inflation, the passing of the US debt bill, and growing evidence supporting the case for the Federal Reserve to pause interest rate hikes this month.

The pan-European STOXX 600 index closed 1.5% higher, with miners and real estate at the forefront of the buying spree.

London's FTSE index had gained 117 points (1.5%) to close at 7,602, while the Paris CAC jumped 133 points (1.9%) to 7,270 and the Frankfurt DAX climbed 197 points (1.2%) to reach 16,051.

Dublin's ISEQ index advanced 105 points (1.6%) to hit 8,657. Shares in Smurfit Kappa gained 3.3% to trade at €34.66, while Ryanair rose 1% to reach €16.87 after it said it flew a record 17 million passengers in May, its highest for a single month and a 10% increase from a year earlier.

US stock indexes were higher on Wall Streetafter data showed a moderation in wage growth in May boosted bets that the Federal Reserve will skip raising interest rates this month, while investors cheered the country averting a debt default.

The Dow Jones rose 589 points (1.8%) to 33,651, while the S&P 500 was up 52 points (1.25%) to trade at 4,273 and the Nasdaq Composite gained 107 points (0.82%) to reach 13,208.

Earlier in Asian trade, Tokyo's Nikkei index climbed 376 points (1.2%) to close at 31,524 - extending Wall Street rallies on hopes that the Federal Reserve could slow its rate hikes. Hong Kong's Hang Seng index surged 733 points (4%) to close at 18,950 on that growing optimism that the Fed will not hike interest rates at its next meeting this month, while traders also welcomed the passage of a bill to avert a US default.