Europe open: Stocks track gains on Wall Street, positive news on trade

After a hesitant start to trading, some investors on the Continent appear to be testing the waters in the wake of the more positive headlines around US-China trade talks and the budget spat between Brussels and Italy.

Critically, overnight China's Ministry of Commerce said the country's trade czar, Liu He, had a telephone conversation with America's Secretary of the Treasury and the US Trade Representative to discuss a timetable for trade negotiations.

Commenting on the market action thus far in the session, Michael Hewson at CMC Markets UK said: "A sharp turnaround in US markets yesterday, which saw them close higher has seen markets in Europe also open on the front foot, despite rising concerns about a worsening slowdown in the global economy, in the wake of yesterday's disappointing Chinese trade data.

"There also appears to be some optimism that the US and China may want to keep the trade negotiations separate from the diplomatic spat involving the arrest of the Huawei CFO in Canada."

Against that backdrop, as of 1015 GMT, the benchmark Stoxx 600 was ahead by 1.28% or 4.35 points to 343.36, alongside a 1.35% or 143.68 point advance for the German Dax to 10,785.46, while the FTSE Mibtel was up by 0.76% or 139.67 points to 18,549.97.

Pacing gains at the sector level, the Stoxx 600's gauge for Basic Resources was jumping 2.11% to 385.31.

Spain's Ibex 35 was higher too, adding 1.03% or 89.10 points to 8,748.90, despite the ongoing political tensions in Catalonia after the regional president reportedly backed acts of civil disobedience, calling on the local police not to act in response, and having at one point moved to purge some of the top ranks of the police.

On a more positive note, according to Italian daily La Repubblica, finance minister Giovanni Tria is trying to convince Rome to lower its target for the country's budget deficit in 2019 to 2.0% as a proportion of GDP, versus the 2.4% goal initially tabled.

Brussels meanwhile was reportedly ready to accept a deficit goal of 1.95% of GDP.

In economic news, INSEE reported that French non-farm employment rose at a quarter-on-quarter pace of just 0.1% over the three months to September (consensus: 0.2%).

But in Germany, the ZEW institute's economic confidence gauge for December improved to a reading of -17.5 after a print of -24.1 for the month before.

Shares of Spanish grocer Dia were reeling a day after the country's market regulator announced it was to exit the top-flight Ibex 35 index, on the heels of a report that the firm had asked its lenders to take a haircut on their loans.