Europe open: Stocks nudge up ahead of ECB rate announcement

European stocks nudged higher in early trade as investors awaited the latest rate announcement from the European Central Bank.

At 0850 BST, the benchmark Stoxx Europe 600 index and France’s CAC 40 were up 0.1%, while Germany’s DAX was 0.4% firmer.

At the same time, oil prices were in the black. West Texas Intermediate was up 0.5% at $45.96 a barrel and Brent crude was 0.5% higher at $47.39.

Investors were looking ahead to the ECB rate announcement at 1245 BST and press conference at 1330 BST, with the deposit rate expected to remain in negative territory at -0.4% and the main interest rate unchanged at 0.00%.

Ana Thaker, market economist at PhillipCapital UK, said: “Much like the Bank of England, the ECB is likely to wait for post-Brexit data to be released before making any significant policy decisions with inflation, production and employment data crucial. Draghi will want to reassure markets that the bank remains in a stable position to provide the necessary assistance to markets and are ready to act when required.

“Whilst markets have previously believed and taken comfort in Draghi’s words, it is increasingly apparent that the ECB is running out of policy measures to tackle stagnant growth in the area; it will be interesting to see if they keep faith in him today.”

In corporate news, EasyJet flew lower after the budget airline posted a drop in revenue per seat and total revenue for the third quarter amid difficult trading that was hit by the terror attack in Brussels and the Egyptair tragedy.

Lufthansa was also under the cosh after it downgraded its profit forecast for this year as terror attacks hit bookings.

Delhaize edged lower as the Belgian retailer said second-quarter revenue rose 4.3%.

On the upside, brewer SABMiller nudged higher after it said the US Department of Justice has given its clearance on the company’s proposed combination with AB InBev.

Unilever was a touch higher after saying it maintained its underlying rate of sales growth at 4.7% in the second quarter but first-half turnover fell.

French luxury goods maker Hermes gained after its second-quarter sales surpassed expectations.