Europe open: Stocks push higher as investors look to Fed announcement

European stocks pushed higher in early trade, with investors shrugging off a weak Asian session as they looked ahead to this week’s Federal Reserve rate decision.

At 0850 GMT, the benchmark Stoxx Europe 600 index was up 0.9%, Germany’s DAX was up 0.7% and France’s CAC 40 was 1.1% higher.

“The moderate rebound in European equities, while welcome, is less than convincing after last week's dramatic falls and confirms that Wednesday simply can't come soon enough for markets,” said Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor.

“Nervousness around the Federal Reserve decision is reaching a critical point and while most consider a rate rise on Wednesday inevitable, what may be more important is the guidance Janet Yellen delivers on the intended pace and timing of future rate rises.”

Oil prices continued to slip after the International Energy Agency said last week that global oversupply could worsen next year.

West Texas Intermediate was down 0.4% to $35.49 a barrel, while Brent crude was 0.3% lower at $37.81.

This week will be crucial as it looks set to mark the first Fed rate hike in almost a decade.

“All signs point to a first move in the Fed’s target rate since November 2008,” said Societe Generale.

“Efforts will be placed on communication this time around, as the Fed will need to carefully harmonize market expectations with their own forecasts. As we saw with the ECB, it is easy to disappoint, so communication will have to play a key role. Nonetheless, we expect Yellen to strike the right balance.”

On the corporate front, Old Mutual and Investec bounced back from heavy losses last week as the rand gained ground following the appointment of a third finance minister in South Africa.

The shares fell sharply last week after finance minister Nhlanhla Nene was sacked, pushing the rand to record lows.

Pharmaceuticals giant AstraZeneca was in the black after confirming that it is exploring potential strategic options with biotech company Acerta Pharma BV.

Vestas Wind rose following the weekend’s climate deal, while Nordex also rallied.

Still to come on the data front, investors will look to the release of Eurozone industrial production figures for October at 1000 GMT.