Europe open: Stocks in the black as earnings lend support

European stocks rose in early trade, underpinned by upbeat Chinese and Japanese manufacturing data and some well-received corporate news, as investors looked to the latest rate announcement from the Federal Reserve.

At 0900 GMT, the benchmark Stoxx Europe 600 was up 0.7%, while Germany’s DAX and France’s CAC 40 were 0.8% higher.

Earlier, figures released in China showed manufacturing in January expanded at close to its fastest pace in two years. China's official manufacturing purchasing managers’ index came in at 51.3, down a touch from 51.4 in December but beating expectations for a reading of 51.2.

Meanwhile, in Japan, a survey revealed manufacturing was at its highest level in nearly three years. The Markit/Nikkei Japan final manufacturing purchasing managers’ index came in at a seasonally-adjusted 52.7, a touch below the flash reading of 52.8 but higher than December’s final reading of 52.4.

Markus Huber, a trader at City of London Markets, said: “European shares are trading higher this morning receiving a boost from firmer markets across Asia, better-than-expected Apple earnings and Siemens revising upwards its profit forecast.

“Furthermore PMI data overnight out of China appears to indicate that the local economy is continuing to show moderate progress which is not only boding well for China but for the global economy as a whole. Besides US earnings and US ADP Employment change data focus will be on the FOMC meeting with the interest rate decision due out later tonight. However with President Trump in office less than a month and yesterday's employment cost index coming in a tad lower than expected, nobody expects the Fed to do anything. Instead Fed chief Yellen and her colleagues are quite happy taking a backseat for now to see how Trump's policies will affect growth and inflation in the months ahead. Overall sentiment is neutral as markets remain short-term overbought and traders seeing little urgency to increase their risk exposure ahead of Friday's release of US non-farm payroll data.”

In corporate news, Spain’s BBVA edged higher despite reporting a 28% drop in fourth-quarter net profit, while pharmaceutical giant Roche also advanced after posting a jump in 2016 profit on the back of strong sales.

Volvo rallied as it reported better-than-expected quarterly core earnings, while Swiss bank Julius Baer made gains as its net profit beat estimates.

Siemens also put in a solid performance after lifting its profit guidance for the fiscal year.

Sweden’s Electrolux was under the cosh, however, despite releasing fourth-quarter results in line with expectations.

In London, TalkTalk was on the rise as it announced that chief executive Dido Harding was stepping down, and said revenue and earnings for the current financial year would be affected by re-contracting activity, but will be in line with previous guidance.

Aerospace and defence group Rolls-Royce was on the front foot as UBS lifted the stock to ‘buy’ from ‘neutral’.

Wizz Air flew lower after the Central and Eastern Europe focused airline cut its underlying net profit guidance for the full year despite reporting a surge in third-quarter profit, on the back of lower fuel prices and severe weather conditions.