Europe open: Equities track US and Asian markets higher

European stocks rose in early trade, taking their cue from positive sessions in the US and Asia, as investors sifted through the latest data on Chinese manufacturing.

At 0900 BST, the benchmark Stoxx Europe 600 index was up 1.2%, France’s CAC was 1.5% higher and Germany’s DAX was up 1.2%.

Mike van Dulken, head of research at Accendo Markets, said that while still in contractionary mode, the China PMI stabilised amid tentative signs that government stimulus is steadying weakness. He said that this, coupled with hopes of more accommodative policy being forthcoming to ensure a return to growth is seeing yesterday’s risk-on sentiment carry through.

According to government data, factory output improved slightly, edging up to 49.8 from August’s three-year low of 49.7 but below the 50 threshold that indicates expansion for the second consecutive month.

Still, the figure was a touch above the 49.7 reading analysts had expected. The sub-index tracking new orders rose from 49.7 to 50.2, while output grew from 51.7 to 52.3, although the gauge of new exports edged lower from 47.9 to 47.7.

Meanwhile, a separate survey conducted by Caixin/Markit revealed the purchasing managers’ index fell to a six-and-a-half year low, slipping from August’s reading of 47.3 to 47.2, although the figure was marginally better than the 47 flash estimate published last month.

Julian Evans-Pritchard, China economist at Capital Economics said the official PMI suggest monetary and fiscal stimulus could be on the cards.

On the corporate front, shares in speciality chemicals company Johnson Matthey rose after it said it has completed the sale of its Alfa Aesar Research Chemicals business to Thermo Fisher Scientific for £256m in cash.

Elsewhere, Tullow Oil surged after saying its lending banks have completed the routine six-monthly reserve-based lend redetermination process and available debt capacity remains unchanged at $3.7bn.

Mining and commodities group Glencore rallied as it continued to recover from recent heavy losses and following an upbeat research note by Citigroup.

On the downside, Altice NV slumped after the telecommunications company said it will launch a €1.8bn capital raising to fund part of its acquisition of US cable carrier Cablevision Systems Corp.

US initial jobless claims are at 1330 BST, while ISM manufacturing and construction spending are at 1500 BST.