Europe open: Shares up as China eases some Covid curbs

European shares were higher at the open on Friday, boosted by news that China was easing Covid restrictions.

The Stoxx 600 index was up 0.43% by 0831 GMT, with all major markets up. China’s Covid easing included shortening quarantines by two days for close contacts of infected people and for inbound travellers and removing a penalty for airlines for bringing in too many cases.

Market sentiment was also lifted by a smaller-than-expected rise in October US inflation increased hopes of less aggressive interest rate hikes from the Federal Reserve.

In economic news, German harmonised inflation for October was confirmed at 11.6% and the UK economy contracted by 0.2% in the third quarter as a long recession loomed.

“With pressures from the cost-of-living crisis, the war in Ukraine and rising interest rates, the UK economy appears to be on track to fall into a recession by the fourth quarter, in what could be the longest period of economic contraction in at least a century,” said Interactive Investor head of investment Victoria Scholar.

In equity news, Swiss luxury group Richemont surged more than 10%after reporting better-than-expected sales and margins.

That news and the potential reopening of China, lifted sector peers LVMH, Kering, Pernod Ricard and Hermes International.

Shares in Dutch tank storage company Vopak surged as the company raised its core profit and operating cash return outlook for the full year, citing supportive business conditions and currency gains.