Europe open: Stocks push higher, fuelled by stimulus hopes

European stocks rose in early trade, extending the previous session’s gains as investors took heart from signs that further monetary stimulus may be on its way.

At 0845 GMT, the benchmark Stoxx Europe 600 index was up 2%, France’s CAC was 2.2% higher and Germany’s DAX was up 1.7%.

Asian shares racked up healthy gains on Friday, with Japan’s Nikkei 225 closing up nearly 5.9%, China’s Shanghai Composite 1.3% higher and Hong Kong’s Hang Seng up 2.9%.

The positive tone was attributed to Draghi’s dovish remarks and comments from Japanese Prime Minister Shinzo Abe’s aide, who said on Thursday that “conditions for additional easing have fallen into place.”

“European equities are trading higher this morning on the back of sharply-rebounding Asian markets overnight and in the aftermath of ECB chief Draghi's comments yesterday,” said Markus Huber, senior market analyst at Peregrine & Black.

“No doubt market reaction to Draghi's comments couldn't have been much different compared to the last ECB meeting back in December. However it needs to be seen if and for how long mere comments and at best potential prospects of further ECB action will manage to push concerns about the Chinese economy and global growth in general out of the limelight.”

Sentiment got a boost on Thursday after European Central Bank chief Mario Draghi hinted that further stimulus could be on the cards, saying the bank will "review and possibly reconsider" monetary policy at its meeting in March.

He said rates in the euro bloc would “stay at present or lower levels fro an extended period”, noting that the outlook for inflation had weakened significantly.

The ECB stood pat on its benchmark rate at 0.05%, as widely expected.

Cyclical stocks, whose performance is closely tied to the overall economy, were the standout gainers.

The Stoxx 600 basic resources index rose 3.2%, while the sub-index for oil and gas jumped 3.7% as oil prices rose above $30 a barrel.

West Texas Intermediate gained 3.7% to $30.62 a barrel and Brent crude was up 4% at $30.42.

In corporate news, Philips slid after the Dutch electronics company said its $3.3bn deal to sell its components business to a consortium of Asian buyers broke down.

In London, Hammerson rallied after announcing an agreement to buy the new Grand Central shopping centre in Birmingham for £335m.