Europe midday: Stocks in the black as basic resources rally

European equity markets were in the black as mining shares advanced on the back of rising metals prices.

At midday, the benchmark Stoxx Europe 600 index was up 0.4%, Germany’s DAX was 0.5% higher and France’s CAC 40 was 0.7% firmer.

On Monday, US equity markets rallied, with the Dow Jones Industrial Average, the S&P 500 and the Nasdaq all closing at record highs.

Oil prices were firmer but off highs amid hopes that next week’s OPEC meeting will see member states and non-OPEC Russia agree a production cut. On Tuesday, a Nigerian delegate said at a two-day technical meeting between delegates that the cartel was likely to reach a deal to cut output. West Texas Intermediate was up 0.3% to $48.40 a barrel and Brent crude was 0.5% higher at $49.12.

The Stoxx 600 sub-index for oil and gas was up 0.9%. But basic resources provided the biggest uplift, with the corresponding sub-index for the sector 3% firmer as metals prices advanced.

Andy McLevey, head of dealing at stockbroker Interactive Investor, said: “European markets have opened positively in early trading following record highs in the US as the post-election rally shows no sign of abating. Energy and resource stocks once again lead the way amid growing optimism that an agreement can be reached between key oil producing nations to cut production continues to boost the oil price.

In corporate news, Genmab was higher after receiving US approval for a drug, while Hikma Pharmaceuticals gained after signing a development and licensing agreement with Vectura for its generic salmeterol product (VR730) for the treatment of asthma and chronic obstructive pulmonary disease.

AstraZeneca edged higher after saying it will resume enrolment for a new cancer drug trial after the US Food and Drug Administration lifted a partial clinical hold on the enrolment of new patients with head and neck cancer.

Rotork surged after the engineering group said revenue for the year is likely to be at the top end of market expectations.

On the downside, food services company Compass Group was on the back foot despite posting a rise in full-year pre-tax profit, while Kingfisher declined as the home improvement retailer said sales kept improving in the third quarter, but like-for-like sales growth slowed due to further softness in France.

France’s Zodiac Aerospace was under the cosh after reporting a drop in full-year 2016 profit, while Essilor slumped after cutting its outlook.