Europe open: Stocks edge higher as investors await ECB

European stocks edged higher in early trade as investors looked to Thursday’s European Central Bank meeting for fresh catalysts.

At 0845 GMT, the benchmark Stoxx Europe 600 index was up 0.6%, Germany’s DAX was 0.5% higher and France’s CAC 40 was up 0.4%.

“European markets are treading water in early trade, as investors ponder where next for markets. Equity markets have been closely correlated with commodities so far this year. Weakness in industrial metals reflected fears over weak Chinese growth, while oil prices were perceived to be a more general bellwether for the global economy. The rally in commodity prices has therefore been an integral part of the sharp recovery in equity markets over the past month,” said Rebecca O’Keeffe, head of investment at Interactive Investor.

“The weight of expectation will be firmly on Mario Draghi's shoulders tomorrow, as investors rely on him to pull whatever levers he can manipulate in order to try and boost growth, inflation and investor optimism.”

In addition, monetary decisions from the US Federal Reserve and Bank of Japan are due next week.

In corporate news, Prudential was a high riser after the insurer reported a 22% rise in 2015 operating profit and lifted its dividend.

German power company E.ON was in the black. Although it said its 2015 loss doubled on impairment charges, the group’s earnings before interest, tax, depreciation and amortisation beat analysts’ expectations.

Credit Agricole was on the front foot after it said it plans to boost synergies and cost savings by 2019.

On the downside, Deutsche Post nudged lower despite reporting record fourth quarter operating profit.

Beleaguered German car maker Volkswagen skidded on news the US Justice Department has sent the company a subpoena under a bank fraud law in its diesel emissions probe.

FTSE 250 security firm G4S tumbled after it posted a drop in 2015 pre-tax profit and revenue, mainly on the back of onerous contracts and restructuring costs.