LONDON (Reuters) - Stocks shuffled back towards all-time highs as solid corporate earnings helped offset simmering U.S.-China trade tensions, while the euro ticked higher as France's prime minister passed the first of two crucial confidence votes on Thursday.

The appeal of safe-haven gold showed little sign of abating as it extended its run of record highs, although the dollar dipped for a third day and oil rose from five-month lows after U.S. President Donald Trump said India had pledged to stop buying oil from Russia.

Europe's bond markets meanwhile cooled after a four-day rally that has driven regional borrowing costs to their lowest level in months.

The second of France's two confidence votes on now-reinstated Prime Minister Sebastien Lecornu was looming shortly as was a debt auction later.

State Street's head of global macro strategy, Michael Metcalfe, said the expectation was that the situation in France should now stabilise with Lecornu likely to pass the test following his pledge to delay a rise in France's retirement age.

"At least they have managed to come to some compromise for now, which removes the risk of a snap election," Metcalfe said, adding the market was also now looking at whether the dollar begins to fall again.

"Have we seen a stabilisation of dollar sentiment, or has it (a modest bounce this month) just been a reflection of higher political uncertainty outside the U.S.?" he said.

HOT CHIPS

Both politics and economics had driven moves in Asia overnight too.

Japan's Nikkei jumped 1.3% and the yen edged down as prospects appeared to brighten for Sanae Takaichi to become Japan's first woman premier, stoking bets on a revival in big spending and loose monetary policy.

Chip- and artificial intelligence-related shares also provided a boost, as Taiwanese chipmaker TSMC, whose customers include Nvidia and Apple, reported record earnings as trading wound down.

Its CEO said it expects robust artificial intelligence demand to continue, as it raised its 2025 revenue guidance to mid-30% growth in U.S. dollar terms from around 30%, and maintained its pledge to spend up to $42 billion this year.

"AI demand actually continues to be very strong - more strong than we thought three months ago," CEO C.C. Wei told an earnings call.

South Korea's tech-dominated KOSPI jumped 2.2% to its own record peak after the country's chief presidential policy adviser said he was "optimistic" about ongoing talks to finalise a trade deal with the United States.

Australian stocks added nearly 1% and also reached a record high after poor jobs data improved the odds in favour of more central bank interest rate cuts. That also dragged down the Aussie dollar. 

"Nobody forecast the unemployment drop," Societe Generale's Kit Juckes said, adding that the yen now looked "stuck" because there will be "a minority government that wants fiscal stimulus and doesn't want rate hikes."

GOLD SURGE CONTINUES

Gold rose as much as 0.8% to reach an unprecedented $4,241.77 per ounce.

The dollar meanwhile sagged for a third straight session, dropping 0.2% against a basket of major peers.

Investors were scrutinising China's latest expansion of rare earth export controls, a move sharply criticised by senior U.S. officials on Wednesday, who warned that it could disrupt global supply chains.

"The question for financial markets is whether China's proposed export controls on rare earths are merely part of a bargaining ploy to achieve greater concessions from the U.S.," said Chris Turner, global head of markets at ING.

Amid the tit-for-tat action, Trump still expects to meet Chinese President Xi Jinping in South Korea this month, U.S. Treasury Secretary Scott Bessent said.

Trump's trade manoeuvres also lifted oil off five-month lows, with Brent crude futures up 0.4% at $62.13 a barrel and U.S. West Texas Intermediate (WTI) futures adding 0.7% to trade at $58.69.

On Wednesday, Trump said India would halt oil purchases from its top supplier Russia, and Washington would next try to get China to do the same as it intensifies efforts to pressure Moscow into a peace deal in Ukraine.

(Editing by Joe Bavier)