Europe open: Slight gains for stocks on US tax cuts optimism

Europe's main equity indices began the day on a positive note, buoyed by slight gains overnight in the US on the back of optimistic comments from US Treasury Secretary Steve Mnuchin.

As of 0811 GMT the benchmark Stoxx 600 was higher by 0.20% or 0.78 points to 387.73, alongside gains of 0.30% to 12,475.27 and an advance of 0.37% in the Cac-40 to 5,286.95.

In parallel, front month Brent crude oil futures are up by 0.04% to $51.54 a barrel on the ICE, while euro/dollar is advancing 0.16% to 1.0916.

"A positive opening call comes as investors return with optimism from a long weekend in spite of disappointing China PMI prints - Manufacturing falling to a 6/7-month low as the rebound moderates - and a mixed session from the US that flowed to Asia overnight as geopolitical risk keeps simmering," said Mike van Dulken, Head of Research at Accendo Markets.

In remarks to Bloomberg TV on Monday, Mnuchin said a combination of tax reforms, regulatory 'relief' and better terms on the country's trade deals could boost US economic growth to 3% on a sustained basis.

One percentage point of additional GDP growth over a decade might generate $2trn of increase tax revenues, Mnuchin said.

His comments helped to offset disappointing news from China, as Caixin's manufacturing sector PMI fell from a reading of 51.2 for March to a seven-month low of 50.3 in April (consensus: 51.3).

On the corporate calendar for Tuesday is a final reading on IHS Markit's euro area manufacturing sector purchasing managers' index for the month of April, at 09:00 GMT, alongside Eurozone unemployment figures one hour afterwards.

Later in the afternoon, the main automakers are set to report their US sales data for April.

Shares in Allianz are moving higher after the insurance group said it would aqcuire British water supply company Affinity.

Bayer is trading lower by 2% after indicating it is seeking approval from US regulators in order to be able to complement dosage options for its stroke prevention pill Xarelto

Italian eyewear group Luxottica saw like-for-like sales drop 3.5% in the first three months of the year as it moved to trim discounts and promotions.