LONDON (Reuters) – European shares opened higher on Friday, surfing on a global recovery rally which has lifted stocks from the lows hit just after Christmas thanks to optimism on Sino-U.S. trade talks and a more dovish tone from the Federal Reserve.
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, January 10, 2019. REUTERS/Staff
All main regional bourses and most industrial sectors were in positive territory, after Asian shares hit a 5-week high overnight and Wall Street a fifth straight session of gains.
At 0922 GMT, the pan-European STOXX 600 was up 0.3 percent, reaching levels not seen for a month and on course for a fourth straight day in the black, which would be its longest winning streak since November.
The are question marks over the sustainability of the rally, however, as investors are eager to get hard evidence about the “tremendous success” President Donald Trump has claimed from the negotiations with China.
“The market wants to see more, which could stall the rally quickly”, wrote Jasper Lawler, head of research at LCG.
In the meantime, sentiment is definitely “risk-on”, noted Neil Wilson, an analyst at Markets.com, who also stressed the need for more details from the trade war front.
Energy stocks .SXEP got a boost from rising oil prices and gained 0.8 percent.
Both stocks, however, quickly limited their gains to 1.2 percent and 0.7 percent respectively.
France’s incumbent operator Orange (ORAN.PA), which would benefit from less competition on its home turf, led the European telecom index .SXKP with a 1.2 percent rise.
The stocks were down 2.1 percent and 1.4 percent respectively.
London’s FTSE 100 outperformed other European indexes, with a 0.8 percent rise thanks notably to UK housebuilders stocks.
BAML upgraded its view on the sector, saying “it seems at least possible, or even probably, that some sort of Brexit resolution is within sight and therefore the UK housebuilding sector may see some relief”.
Reporting by Julien Ponthus; Editing by Andrew Heavens and Mark Potter