Europe open: Stocks push higher as Fed leaves rate on hold

European stocks pushed higher in early trade following positive leads from the US and Asia after the Federal Reserve stood pat on rates but suggested a hike would come later this year.

At 0845, the benchmark Stoxx Europe 600 index was up 0.6%, Germany’s DAX was 1% higher and France’s CAC 40 was up 0.9%.

Meanwhile, oil prices advanced, with West Texas Intermediate up 0.7% to $45.67 a barrel and Brent crude 0.6% firmer at $47.12.

On Wednesday the Fed kept interest rates unchanged at between 0.25% and 0.50%, with three members dissenting in favour of an immediate 25 basis points hike. The central bank said the case for a rate increase has strengthened, leaving the door open to a move by the end of the year.

The Federal Open Market Committee said: “The Committee judges that the case for an increase in the federal funds rate has strengthened, but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”

Mike van Dulken and Henry Croft at Accendo Markets said: “A positive start for equities comes as no surprise after risk appetite was given a boost by the US Federal Reserve electing not to hike rates last night, dovetailing nicely with the BoJ’s stimulus tweaking yesterday to keep the loose policy party in full flow.

“Fed Chair Janet Yellen’s message of economic progress, but not enough to move this month, is being interpreted as a hawkish hold, prepping us for a December hike to keep excessive market complacency at bay. There was nonetheless something for both the hawks and doves, providing the US central bank with enough wiggle room to swerve a pre-Christmas hike if necessary.”

In corporate news, shipping company Moeller-Maersk traded higher after announcing it will split into two separate units.

Micro Focus International was in the black after confirming its full-year guidance.

Property, residential, construction and services company Kier Group rallied after its full-year numbers met analysts’ expectations.

Pub group Mitchells & Butlers gained ground after it reported a drop in full year sales but a rise in the most recent eight weeks of trading, as it reiterated that full-year margins will be below the previous year.

On the downside, EDF was in the red after it said on Wednesday that it was downgrading its expectations for 2016.

Rolls Royce was on the back foot after it appointed Stephen Daintith of the Daily Mail as chief financial officer from 2017.

Education publisher Pearson was also weaker after Exane BNP Paribas downgraded the stock to ‘neutral’ from ‘outperform’.

There are no major eurozone data due, but in the US, initial jobless claims are at 1330 BST, with leading indicators, existing home sales and consumer confidence at 1500 BST.