Europe open: SPD leaves door open to talks with Merkel in boost for stocks

Stocks on the Continent are moving modestly higher after Germany's SPD signaled they are moving closer to offering at least a degree of support for a government led by Chancellor Angela Merkel.

Speaking to DPA after eight-hour long talks that stretched into the early hours of Friday, SDP Secretary General Hubertus Heil said his party would not reject talks if the country's president decided that was the best path to follow.

As of 1035 GMT, the benchmark Stoxx 600 was edging higher by 0.08% or 0.30 points to 387.43, alongside a 0.15% or 19.89 points advance on the German Dax to 13,028.94 and a gain of 0.69% or 153.76 to 22,554.23 on the FTSE Mibtel.

In parallel, the yield on the benchmark 10-year German bund was higher by two basis points to 0.36%.

"With most US investors likely to take an extended weekend when US markets reopen later it could well be more of the same today in what has been a rather up and down week for markets in Europe.

"Despite a continued improvement in economic data with manufacturing and services PMI’s in both France and Germany showing solid improvements, reaching multi year highs in the process, stock market gains have been difficult to sustain despite two successive weeks of losses," said Michael Hewson, chief market analyst at CMC Markest UK.

On the economic front, confidence among Germany's businessmen was buoyant in November, with the IFO institute's sentiment gauge hitting a fresh record high of 117.5 points, thanks to improved expectations. By sectors, sentiment among manufacturing and wholesaling was strongest, while that in construction and retailing in fact retreated.

"The German economy is on track for a boom. The latest figures indicate economic growth of 0.7 percent in the fourth quarter, pointing to growth of 2.3 percent for 2017 as a whole," IFO said in a statement.

Meanwhile, in Italy, ISTAT reported a 3.9% drop in the country's industrial orders in September.

Later in the day, INSEE was set to release its latest tally for job-seekers during the month of October at 1700 GMT.

Shares in Spain's Banco Santander are trading on the front foot following an upgrade out of Goldman Sachs from 'hold' to 'buy'.

According to the broker, Santander is the best option among its peers for investors hoping to avoid the fall-out from any political uncertainty in Catalonia. However, Goldman also recommended clients purchase 'call' options on CaixaBank, the largest Catalan lender, as a less-risky away of maintaining exposure to any potential upside.

Altice, the telecommunications and cable group, is aiming to raise as much as €3bn in funding via the sale of its business in the Dominican Republic, two sources close the matter told Reuters on Thursday.

In other news, according to Il Sole 24 Ore Italy's Banca Carige was set to sell its consumer credit arm to US hedge fund Christofferson Robb Company.