Europe open: Shares up sharply on Wall St rally

European shares rose sharply at the open on Monday as a report that the US Federal Reserve would discuss a smaller interest rate rise in December boosted sentiment.

The pan-regional Stoxx 600 index was up 1.2% in early deals.

Britain’s FTSE 100 was flat as former finance minister Rishi Sunak looked set to become the country’s third prime minister this year after a theatrical intervention by deposed leader Boris Johnson, whose bid for a return to Downing Street evaporated limply after he failed to meet the threshold of backers.

Sunak claims to have the support of more than 130 lawmakers. His only rival, Penny Morduant, appeared to be well short of the 100 required to force a vote of the Conservative Party membership - meaning Britain's next prime minister will have been chosen by an electorate of 357 people.

Wall Street rallied on Friday after a report said the Fed will likely debate on a smaller interest rate hike in December.

In equity news, shares in Philips gained after the Dutch medical equipment maker said it expected to axe 4,000 jobs as it tried to streamline its organisation.

Dutch technology investor Prosus lost about 10%, tracking weakness in Hong Kong tech giants, after Chinese President leader Xi Jinping's newly unveiled leadership team heightened fears that economic growth will be sacrificed for ideology-driven policies.

Shares in educational publisher Pearson gained after an upbeat third-quarter trading statement.

Reporting by Frank Prenesti for Sharecast.com