Europe open: Basic resources pace advance as copper rallies

European stocks rose in early trade, with basic resources pacing the advance as copper prices rallied.

At 0900 GMT, the benchmark Stoxx Europe 600 index was up 0.2%, Germany’s DAX was 0.5% firmer and France’s CAC 40 was up 0.4%.

Meanwhile, oil prices pushed higher, with West Texas Intermediate and Brent crude down 0.7% to $53.51 a barrel and $56.33 respectively.

David Morrison, senior market strategist at SpreadCo, said: “US stock index futures are firmer in early trade with investors seemingly uninterested in booking profits following Friday’s sharp rally. European equities are also playing catch-up with Wall Street. All the US majors closed out at fresh record highs last week after President Trump promised some big news on tax within the next few weeks. He also spoke to Chinese premier Xi Jinping and promised to honour the ‘one China’ policy. This has helped to restore positive sentiment after investors suffered a rocky fortnight thanks to Trump’s attempted travel ban and protectionist rhetoric.

“But it’s unlikely that just a promise on tax will be enough to keep equities heading higher. Investors will want to see details to keep momentum going. But before that happens attention will once again turn to the US Federal Reserve and the outlook for monetary policy. Janet Yellen testifies in Washington tomorrow and Wednesday and investors will be listening out for clues over future tightening.”

Basic resources racked up healthy gains, with the Stoxx 600 sub-index for the sector up 1.1% as copper prices jumped to a 20-month high on the back of supply concerns after BHP Billiton declared a force majeure due to a strike at its copper mine in Chile.

Stada was the top performer after it said over the weekend that it has received two offers for its acquisition, one of which is from private equity group Cinven Partners LLP.

Royal Bank of Scotland gained ground on reports it was planning to cut more than £800m of annual operating costs by slashing jobs and closing branches.

Heineken was little changed after agreeing to buy beer and soft drinks maker Brasil Kirin Holding from Japan’s Kirin Holdings for €664m.

Software provider Fidessa advanced after it declared both a final and special dividend, with profits strongly boosted by the weak pound.

Sanofi nudged up as it agreed to sell a portfolio of five drugs in Europe to Ipsen for €83m to help pave the way for a takeover of certain assets from Germany's Boehringer Ingelheim.

Swedish defence company Saab was under the cosh after it reported quarterly operating profit that missed analysts’ expectations.