Europe open: Stocks recover from heavy losses as miners rally

European stocks pushed higher in early trade, recovering from heavy losses in the previous session.

At 0845 GMT, the benchmark Stoxx Europe 600 index was up 0.7%, Germany’s DAX was 0.3% higher and France’s CAC 40 was up 0.4%, having fallen sharply on Monday in line with Asian markets.

Miners, which took a big hit on Monday amid worries about a slowdown in China, were among the best performers. The Stoxx 600 basic resources index rose 2%.

In Asia, however, markets remained volatile. The Shanghai Composite ended a choppy session slightly lower after the People’s Bank of China pumped 130 billion yuan into the financial system as it attempted to calm markets following Monday’s rout.

“Equities are enjoying what appears to be a brief respite from the storm this morning, but any argument to push on up from here will not hold much water in the short term,” said Mike McCudden, head of derivatives at stockbroker Interactive Investor.

“The PBOC, which has been acting valiantly over the past year by throwing any means at their disposal at the stuttering economy, must surely be running out of ideas. However, this morning's bounce is largely down to their continued efforts.”

On the corporate front, FTSE 100 clothing retailer Next slid after its Christmas sales disappointed.

More food focused Tesco rallied after Deutsche Bank upgraded the stock to ‘buy’ from ‘hold’.

Dialog Semiconductor was higher following a media report that Microchip Technology is planning to submit a bid for Atmel Corp by early next week, challenging Atmel’s planned merger with Dialog Semiconductor.

Beleaguered German car maker Volkswagen skidded after the US Justice Department sued the company in a civil action over the installation of emissions-cheating devices.

On the upside, navigation software maker TomTom gained ground after saying BMW chose its traffic information in Russia, New Zealand and Australia.