Europe open: Stoxx rallies as China pledges to increase fiscal support

European stocks rallied strongly at the open on Thursday, driven by a strong session in Asia, with luxury stocks in focus as China pledged to step up fiscal support after introducing stimulus measures earlier in the week.

The pan-European Stoxx 600 index was up 0.93% at 524 as it nudged within sight of record territory. Germany’s DAX and Britain’s FTSE 100 also posted strong gains in early trading.

China’s ruling politburo pledged to increase fiscal support for the domestic economy, giving rise to optimism that more intervention was on the way in a week where the country's central bank unveiled a swathe of stimulus including rate cuts.

Elsewhere, investors will be keeping an eye on US weekly jobs data and a speech by US central bank chief Jerome Powell.

Brent crude prices fell 3% to $71 on rumours Saudi Arabia was set to abandon its unofficial price target of $100 per barrel, with an unwinding of voluntary production cuts starting in December.

In equity news, French videogame maker Ubisoft slumped after the company postponed the release of ‘Assassin's Creed Shadows’ by three months to February 14 and cut net bookings guidance.

On the positive side, luxury goods stocks, all heavily exposed to the Chinese market, were once again in favour.

Burberry, Remy Cointreau, Kering, LVMH, Christian Dior, Moncler and Watches of Switzerland all made strong gains.

Reporting by Frank Prenesti for Sharecast.com