Europe open: Stocks edge higher as retailers shine

European stocks rose in early trade, taking their cue from a late recovery on Wall Street, as retailers put in a strong performance.

At 0900 GMT, the benchmark Stoxx Europe 600 index was up 0.2%, France’s CAC 40 was 0.5% higher and Germany’s DAX was 0.9% firmer.

In the US, the Dow Jones Industrial Average and the S&P 500 managed to eke out small gains on Monday following a choppy session.

In Asia, stocks were mostly lower, with the exception of mainland China, where the Shanghai Composite ended up 0.2%.

In European corporate news, retailers were in focus, with supermarket operator Morrisons surging in London after it delivered an unexpectedly solid Christmas trading update. Like-for-like sales were up 0.2% in the nine weeks to 3 January, beating expectations for a 2% drop.

Peers Tesco and Sainsbury were both firmly in the black.

Debenhams’ Christmas sales also came in comfortably ahead of expectations, pushing the stock sharply higher.

German retailer Metro AG advanced after reporting strong Christmas sales, with revenue in line with expectations.

Car maker Peugeot was also on the front foot after it posted a 1.2% rise in 2015 sales thanks to strong demand in Europe.

In commodities, oil prices were hovering near the $30 mark, with Texas Intermediate down 2.7% to $30.57 and Brent crude down 2.5% at $30.76.

SpreadCo analyst David Morrison said Goldman Sachs’ prediction of $20 a barrel “isn’t looking quite as outrageous as when they made the call in September last year”.

“Unlike the gold story, the sell-off in crude is about more than dollar strength. Firstly, demand growth is appreciating relatively slowly as global economic activity remains subdued. At the same time, there are fresh concerns that China may experience a hard landing as policymakers attempt to rebalance the economy away from reliance on manufacturing/exports and attempt to boost domestic consumption.”

Morrison noted that on the supply side, over the last six months US production has fallen from 9.6m barrels per day to around 9.1 million, with most of the decline in shale oil and no let-up in supply from conventional sources such as the Gulf of Mexico.

“Nevertheless, US supply isn’t expected to fall much further in first half of this year. But OPEC production is expected to continue to exceed the old ceiling of 30m barrels per day by a significant margin.”