Europe open: Stocks push higher as oil prices recover

European stocks rose in early trade, taking their cue from an upbeat session on Wall Street, as oil prices gained back some ground.

At 0900 GMT, the benchmark Stoxx Europe 600 index was up 0.5%, Germany’s DAX was 0.7% higher and France’s CAC 40 was up 0.3%.

Spain’s IBEX 35 fared a lot better than it had on Monday, trading up 0.5% despite the backdrop of political uncertainty following the weekend’s inconclusive election.

Simon Smith, chief economist at FxPro said the move higher in Europe was “more a reflection of dwindling volumes leading to heightened volatility as we move closer to Christmas, as well as a recovery in US stocks towards the close last night”.

Sentiment also got a boost after China’s leaders indicated that they will take additional steps to support growth, including widening the fiscal deficit and propping up the housing market.

Statements released at the end of the government’s Central Economic Work Conference by the official Xinhua News Agency revealed that leaders believe monetary policy needs to be more flexible and fiscal policy more forceful to create the monetary conditions needed for structural reforms.

West Texas Intermediate was up 0.9% to $36.14 a barrel, while Brent crude was 0.6% firmer at $36.58 after falling to 11-year lows in the previous session. The recovery in oil prices helped to lift the Stoxx 600 oil and gas index 1.1%, with London-listed BG Group and BP firmly in the black.

Shares in Dutch staffing group USG People rocketed after Japanese employment agency Recruit agreed to buy the company for €1.4bn.

On the downside, ITV slipped after a spokesman for Comcast told Variety magazine that speculation it was looking to bid for the London-listed broadcaster was “completely inaccurate.”

Still to come, investors will look to the third release of third quarter US GDP at 1330 GMT and existing home sales at 1500 GMT.