LONDON (Reuters) – European stocks rose on Thursday following extraordinary gains in Asia and the United States, as exuberance shot through markets and reversed initial dives in reaction to Donald Trump’s U.S. presidential victory. Investors focused on Trump’s priorities – including tax cuts and higher infrastructure and defense spending, along with bank deregulation – and set aside for the moment longer-term worries about whether he will slap punitive tariffs on Chinese and Mexican exports, risking a global trade war. European stocks hit a two-week high, with the pan-European STOXX 600 index up 1.3 percent in early dealings, and “safe haven” government bonds sold off after Trump suggested he would spend billions on infrastructure. This marked an abrupt change from the sharp recoil on markets on Wednesday after the Republican candidate’s triumph. Investors saw signs that Trump will ditch the budget austerity policies that Western governments have pursued since the 2008 global financial crisis after he takes over in January. “Trump’s speech following the victory was hugely influential in yesterday’s sudden U-turn, as he focused more on unity and the need to spend to get the economy growing again. These policies combined with his desire to deregulate and lower taxes are all very market-friendly,” said Craig Erlam, senior market analyst at OANDA.