Europe open: Shares rally as miners gain, US debt talks inch ahead

European shares rallied on Friday, driven by rising mining stocks as talks on the US debt ceiling crept towards a resolution.

The pan-European Stoxx 600 index was up 0.42% in early deals.

US President Joe Biden and House Speaker Kevin McCarthy were adamant overnight that they would work hard to agree a ceiling on government spending and avoid a default.

In economic news, UK retail sales in the UK rose 0.5% in April, following a fall in March.

"Industry figures suggest the very wet weather during March may have made for easier comparisons, but there looks to be some underlying real progress. Sales of watches and jewellery and department store performances helped non-food sales climb, and suggest that belt-tightening perhaps isn’t as potent as feared," said Hargreaves Lansdown analyst Sophie Lund-Yates.

"Food store volumes also rose, by 0.7% on a monthly basis. This is largely a function of the essential nature of groceries, but compared to pre-pandemic levels, food store volumes are 2.7% down on their pre-pandemic peak. Consumers are clearly being more discerning about the number of additional extras finding their way into trollies, setting supermarkets up with a dilemma when it comes to margins."

In equity news, miners Rio Tinto, Anglo American and Antofagasta all made health gains.

Shares in French information technology firm Atos surged as a US appeals court vacated a previous legal ruling as part ongoing litigation involving its Syntel unit over allegations of trade secret misappropriation and copyright infringement. The case began in 2015, before Syntel’s acquisition by Atos in 2018.

Reporting by Frank Prenesti for Sharecast.com