Europe open: Stocks push higher as deal news provides a boost

European stocks edged higher in early trade, supported by a positive session in Asia, with deal news also underpinning sentiment.

At 0900 GMT, the benchmark Stoxx Europe 600 index was up 0.6%, Germany’s DAX was 1.5% firmer and France’s CAC 40 was up 0.5%,.

“European stocks are trading higher this morning as a late selloff in US shares is more than cancelled out by higher markets across the board in Asia overnight. Despite somewhat weaker and disappointing Chinese PMIs overnight, the lowering of the reserve ratio rate by the PBoC after the close of the Chinese markets yesterday is driving stocks higher today,” said Markus Huber, senior analyst at Peregrine & Black.

“Furthermore much of the weaker readings of the PMIs was attributed to possible distortions related to last month's Chinese New Year celebrations. Also giving stocks a boost are firmer oil prices this morning as of late stock indices have closely correlated to oil.”

West Texas Intermediate was up 1.3% to $34.18 as barrel while Brent crude was 0.9% higher at $36.89.

Stocks in Asia managed to shrug off weak readings on China’s manufacturing as investors continued to cheer the People’s Bank of China’s cut to the reserve requirement ratio and amid stronger oil prices.

The Caixin Purchasing Managers Index fell to 49.0 in February from 49.4 the month before, missing consensus forecasts for an unchanged reading.

Meanwhile, the official manufacturing PMI from China's National Bureau of Statistics also disappointed, falling to 49.0 versus 49.4 the month before and forecasts for the same.

Deal news provided a boost on Tuesday, with London Stock Exchange sharply higher after Intercontinental Exchange confirmed it was considering making a bid for the UK exchange to rival Deutsche Boerse’s.

Glencore was on the front foot despite posting a 69% drop in net income for 2015 on the back of weaker commodity prices.

On the downside, Barclays slumped after announcing a drop in full year profit and a large cut to the dividend. For the year to 31 December, adjusted pre-tax profit slipped 2% to £5.4bn compared with analysts’ expectations for around £5.8bn.