Europe open: Shares rally despite Evergrande woes, rising oil price

European shares rallied on Thursday despite more woes from troubled Chinese property developer Evergrande, which hit shares in Hong Kong overnight.

The pan-European Stoxx 600 index was up 0.10 in early deals after losses this week on the back on investor fears over rising interest rates.

Shares in the heavily-indebted property developer Evergrande were suspended in Hong Kong. Trading in the crisis-hit Chinese firm had only resumed last month following a previous 17-month suspension.

While no reason was given for the latest halt, which was requested by the company, it comes amid reports that Evergrande’s billionaire founder and chair, Hui Ka Yan, has been placed under police surveillance.

‘’Cautious sentiment is dominating as oil prices ramp up while investors digest yet more unappetising news about China’s fragile property sector, fuelling worries about contagion in the economy," said Hargreaves Lansdown analyst Susannah Streeter.

"Concerns about tight supplies are fuelling the rise in oil prices, reigniting worries about inflation and the need for interest rates to stay higher for longer. Brent Crude has swept past $97 a barrel as the effect of Saudi Arabia and Russia’s extended production cuts takes hold and data shows a faster than expected drawdown of crude stocks in the United States."

Investors were also eying preliminary inflation readings from Germany.

In equity news, gambling shares were down after 888 Holdings issued a profit warning. Ladbrokes owner Entain, which did similar this week, fell again, while Flutter was also lower.

Reporting by Frank Prenesti for Sharecast.com