Europe open: Shares up, oil holds above $100 ahead of ECB rate call

(Sharecast News) - European shares opened higher as oil continued to trade above $100 a barrel and traders eyed an expected interest rate hike from the European Central Bank.

The benchmark Stoxx 600 index was up 0.17% to 641, having fallen to a six week low on Wednesday amid mounting Iran war tensions, raising bets that central banks worldwide will soon have to act to fight inflationary pressures.

Economists expect the ECB to lift its policy rate to 2.50% from 2.25%.

US President Donald Trump, who has frequently claimed that Iran's military capability had been wiped out despite plentiful evidence to the contrary, said Tehran was dragging the war out to harm his Republican Party's chances in the upcoming mid-term elections.

He said petrol and food prices would not come down until "right after the election" - almost two months away.

In economic news, Germany's inflation rate held at 2.9% in August, federal statistics office Destatis confirmed on Thursday, matching the flash estimate as higher energy costs continued to offset softer food and core price pressures.

Headline CPI rose 0.2% monthonmonth, with energy inflation jumping 10.5% - the biggest jump in three years - on elevated wholesale gas and power prices, while food prices were broadly flat after months of easing.

On the equities front, shares in Primark owner Associated British Foods slumped by 10% as the company said it expected annual like-for-like sales to fall.

Reporting by Frank Prenesti for Sharecast.com