Europe open: Miners and energy shares pace the advance

European stocks gained ground in early trade, taking their cue from positive sessions in the US and Asia and underpinned by rising oil and metals prices.

At 0850 GMT, the benchmark Stoxx Europe 600 index and Germany’s DAX were up 0.7%, while France’s CAC 40 was up 0.9%.

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

Meanwhile, oil prices were in the black amid hopes that next week’s OPEC meeting will see member states and non-OPEC Russia agree a production cut. West Texas Intermediate was up 3.9% to $47.49 a barrel and Brent crude was 0.3% higher at $49.02. The Stoxx 600 sub-index for oil and gas was up 1%.

At the same time, the corresponding sub-index for basic resources was up 3% 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.

“We’ve been here before however, and with the UK autumn budget tomorrow there will be enough to keep investors on their toes and we may see some profit taking from recent gains as momentum may subside ahead of the US Thanksgiving holiday on Thursday.”

In corporate news, Genmab was in the back after receiving US approval for a drug and 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.

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.