Europe open: Stocks edge higher, but analysts cautious

Stocks have started the session higher, helped by a rally in Italian government debt markets, although analysts were still quite cautious.

Best summing-up the situation in markets, Michael Hewson, chief market analysts at CMC Markets, told clients: "There is still an element of caution prevailing in the market at the moment, something that was illustrated with some capital flows into gold yesterday, which saw the yellow metal hit its highest levels since July.

"European markets managed to buck the trend of a weak Asia and US session, closing higher yesterday, however the move up was on pretty low volume and as such needs to be treated with an element of caution."

As of 1030 BST, the FTSE Mibtel was trading higher by 0.95% or 182.27 points to 19,464.24, alongside an advance of 0.20% or 23.12 points to 11,634.28 for the German Dax and a gain of 0.39% or 1.40 points to 360.71 for the benchmark Stoxx 600.

In parallel, the yield on the benchmark 10-year Italian government note was down by 11 basis points at 3.44%, while euro/dollar was drifting lower by 0.08% to 1.15705.

To take note of, Italian Premier, Giuseppe Conte, was to deliver a speech at 1400 BST, ahead of the start of the EU leaders' summit which was due to start the next day.

Economic data out on Tuesday helped to underline some of the the risks that investors were fretting might be lurking in the background.

On that note, the ZEW Institute reported that in October its closely-followed index of analyst confidence in the German economy recorded its largest month-to-month fall since Brexit, dropping by 14.1 points to -24.6.

According to the research institute, the main drag on confidence was the ongoing trade spat between China and the US and, to a lesser extent, the risk of a 'hard Brexit' and the now more "unstable" situation of the governing coalition in Berlin.

Meanwhile, Eurostat reported a jump in the Eurozone's seasonally adjusted trade surplus from €12.6bn for July to €16.6bn in August, on the back of a 2.1% month-on-month rise in the bloc's exports.

In Italy, ISTAT revised its preliminary reading on the increase in harmonised consumer prices in the euro area's third-largest economy last month from 1.6% year-on-year to 1.5%.

Volvo was perhaps the standout faller in Europe, with its shares off sharply after announcing that it had detected faults in the emission-controls setup of its trucks.