Europe open: Stocks start higher, investors brush off weakness in bank shares

European stocks were higher in early trading despite the drag from a drop in lenders' shares, especially in Spain, as investors looked to US jobs data later in the day.

As of 0905 BST the benchmark Stoxx 600 was 0.30% higher to 391.15, alongside gains of 0.34% for Germany's Dax to 12,658.57 and a rise of 0.47% in the Cac-40 to 5,308.14.

"Over in the Eurozone there wasn’t a lot going on, with the DAX and CAC effectively flat at the start of the session. Like the UK, the region sees a wave of manufacturing data, with the Spanish PMI already beating expectations at 55.4. The Eurozone-wide figure is forecast to come in at 57.0, in the process cementing the best reading in 6 years," said Conor Campbell, financial analyst at Spreadex.

Indeed, Markit´s May euro area purchasing managers' index increased from a print of 56.7 for April to 57.0 in May, just as expected.

In parallel, ISTAT announced that Italy's economy grew at a 1.2% pace year-on-year during the first quarter, beating forecasts for a rate of expansion of 0.8%.

Acting as a backdrop, overnight German central bank chief Jens Wiedmann sounded a hawkish note, telling an audience that the recent strengthening of the euro area's economy made it more likely that recent higher inflation was not just a "flash in the pan".

Nevertheless, in the backhalf of the week the market spotlight was shifting from the European Central Bank and the debate around when it would begin to shift its policy towards the US jobs market and the outlook for monetary policy in the States after June.

The ADP jobs report in the States was scheduled for release at 1315 BST, followed by the ISM manufacturing sector PMI at 1500 BST.

In corporate news, the Stoxx 600 bank's sector index was down by 0.30% as stock in Banco Popular shed another 8% amid media speculation that the troubled lender might not be able to find a buyer.

Meanwhile, Spain's Unicaja Banco announced its intention to float 40.4% of its capital.

Fincatieri was also in the news after French president Emmanuel Macron said he wanted to review the terms of the sale agreement of the STX France shipyard to the Italian group.