Europe open: Equities push higher, tracking gains in the US and Asia

European stocks pushed higher in early trade, tracking gains in the US and Asia as fears of a September rate by the Federal Reserve receded.

At 0900 BST, the benchmark Stoxx Europe 600 index was up 2.5%, France’s CAC 40 was 2.4% higher and Germany’s DAX was up 2.9%.

Comments on Wednesday by chair of the New York Federal Reserve Bill Dudley, suggesting that a September rate hike is now “less compelling”, helped to underpin the mood.

At a press briefing on the regional economy, Dudley, who is a well-known dove among the rate-setters, said that given recent market turmoil, a rate hike next month may not be appropriate.

A positive session in Asia, which took its cue from Wall Street, also helped to lift sentiment. The Shanghai Composite ended up more than 5% while the Hang Seng closed 4.1% higher and the Nikkei 225 finished up 1.1%.

“For now there is quite a bit of relief that stocks in China are finally staging a moderate and long awaited bounce-back,” said Markus Huber, senior analyst at Peregrine & Black. “Confidence seems to be returning that if more needs to be done by the PBoC and the Chinese government in order to support the Chinese stock market and the economy that it will be done.

“There is also speculation that the ECB possibly as early as next week might announce an extension and upping of their QE program. No doubt things are looking a bit brighter for stocks compared to earlier in the week however it still needs to be seen if the worst is indeed behind us or if we are just in the middle of a ‘technical’ bounce with more downside to come soon.”

On Tuesday, the People’s Bank of China announced that it was lowering its benchmark lending and deposit rates by 25 basis points with effect from 26 August and cutting its reserve requirement ratio by 50 basis points, starting from 6 September. The following day, it announced that it would inject 140bn yuan into the financial system via short-term liquidity operations.

Asian markets appear to have stabilised somewhat on the back of these measures, although market commentators said investors will likely continue to tread carefully as underlying worries about growth prospects in China remain.

In corporate news, French telecoms company Bouygues rallied as it reported a 51% jump in first-half operating profit and lifted the 2015 profit target for its phone operations.

Fresenius also posted strong gains after the healthcare group said it would increase its 2015 dividend by more than 20%.

Shares in Irish construction group CRH rose sharply after it posted a 3% increase in interim profit on revenue of €9.4bn. up 13% from last year.

Spirits maker Pernod Ricard was on the back foot after its full-year profit missed market expectations.