Europe open: Shares rise on US stimulus deal hopes

European stocks were higher on the first day of the final quarter of the year on hopes a deal could be reached between US lawmakers on a fresh stimulus package.

The pan-European Stoxx Europe 600 rose 0.6%, with all major European bourses in positive territory.

US Treasury Secretary Steven Mnuchin said he was willing to make a final effort at brokering a deal with the Democrats on the proposed coronavirus relief package. The Democrats have put forward a package worth $2.2trln, far more than the $1.5trln proposed by the Republicans.

“To an extent, there isn’t a huge amount of pressure on the Trump administration to reach a deal as the unemployment rate in August fell to 8.4%. Yesterday, the US posted solid economic indicators, so that might hold back the Republicans from compromising too much,” said CMC Markets analyst David Madden.

Shares in Swedish fashion chain H&M rose more than 5% as the company said it had hurdled the worst effects of the Covid-19 pandemic with better-than-expected third-quarter earnings.

Computer chipmaker STMicroelectronics topped the leaderboard, with the shares up 5.9% after stronger-than-forecast third-quarter revenue of $2.67bn.

Bayer shares plunged 12% as the German pharmaceutical and chemicals company said 2021 core earnings would be slightly lower. The company said lower commodity prices were hurting sales.

Rolls-Royce shares fell 5.2% as the UK aircraft engine maker said it would tap shareholders for £2bn through a heavily discounted rights issue and also raise at least £1bn in bonds.