Europe open: Markets extend gains as investors take cues from Asia, US

European shares opened higher on Friday as investors followed the positive sentiment in Asia and the US.

The UK's FTSE 100, Germany's Dax and France's CAC-40 were all in positive territory after record gains on Wall Street.
US equity markets closed mostly positive overnight as investors continued to digest President Trump’s framework for tax reform.

The main focus for the eurozone region on Friday was the flash inflation figure for September, with analysts forecasting a rise from 1.5% to 1.6% month-on-month; if accurate, that could see the euro’s gains against the pound joined by some growth against the dollar, said Connor Campbell at Spreadex.

Crude Oil prices were still under pressure after three straight days of falls as Brent and US crude prices were subject to profit taking.

Gold was steady, having traded off Thursday's one-month low as the US dollar retreated from five-week highs.

“While it has retreated from its overnight highs of $1289, the precious metal is holding above support at $1284,” said analysts at Accendo Markets.

In France, inflation was up slightly to 1% in September after a 0.9% rise in August. Consumer spending in the country fell an unexpected 0.3% on month, the national statistic agency Insee said.

Investors were also looking ahead to events in Spain where the illegal referendum on Catalonian independence was due to take place.

“The potential impact would be on the country's bonds unless the county's PM manages to stop the vote. The Spanish equity markets had outperformed the European peers so far this year but the recent illegal referendum situation has taken the toll on the IBEX index,” said Naeem Islam at Thinkmarkets.

Ipek Ozkardeskaya at LCG said a vote in favour of independence could weigh on the European integrity sentiment and hit the euro at next week’s open.

"In addition, the government’s reaction is important. Protests, a heavy-handed police intervention and political unrest could affect the euro-appetite in the aftermath of the Sunday’s referendum. On the other hand, a no vote should give a better colour to the single currency. Given the light risk pricing across the euro markets, the rally could remain short-lived," she said.

In corporate news, QinetiQ said trading had been in line with expectations, and the outlook for overall group performance for the financial year remained unchanged.
Aviva said it has agreed to sell its stake in Italian joint venture Avipop Assicurazioni to Banco BPM for a consideration of €265m (£233m) in cash.