Europe open: Equities climb on back of China's RRR cut

LONDON (ShareCast) - European equities opened in positive territory after China's central bank signalled further stimulus measures to boost growth. The People´s Bank of China (HKSE: 3988-OL.HK - news) lowered the amount of cash that lenders must hold as reserves will help keep liquidity stable. The reserve requirement ratio (RRR) for all banks by cut by 100 basis points to 18.5%effective from 20 April.

The reduction was twice the amount expected by analysts at Capital Economics and marked the largest decrease since late 2008.

"Sunday's cut to the RRR for China's banks signals a stepping-up of policy support," said Mark Williams, chief Asia economist at Capital Economics.

"It also suggests that any concerns policymakers have about the rapid gains in equity prices have been put on the back burner for now." Back in the Eurozone, Greek bonds were weakening as fears of a default grew after International Monetary Fund (IMF) chief Poul Thomsen said talks have gathered momentum but still have a long way to go.

Greece is trying to convince the IMF and the EU to agree to its economic reforms in order to unlock further aid. Greece owes the IMF debt repayments on 1 May and 12 May.

The euro fell 0.14% to $1.0791 in morning trade.

In commodities, Brent crude was up 0.42% to $63.72 per barrel while Wset Texas Intermediate grew 0.83% to $56.21, ICE data revealed.

Companies: Telenet (Other OTC: TLGHY - news) , Tesco Telenet Group Holding jumped after agreeing to buy Royal KPN NV's Belgian mobile-phone business Base for €1.33bn. KPN (Amsterdam: KPN.AS - news) gained.

Tesco (Xetra: 852647 - news) dropped after the Financial Times reported the grocer may post an annual loss of as much as £5bn on Wednesday.

Anglo American (LSE: AAL.L - news) and Outokumpu Oyj (Xetra: OUTA.DE - news) rose to lead mining stocks higher as industrial metals increased on the back of China's RRR cut.

Petrofac slumped after saying it expects a further loss on its Shetland gas project this year, due to delays and higher costs.