Europe open: Stoxx up with Rio-Glencore talks, geopolitics in focus

(Sharecast News) - European shares were higher at the open on Friday with geopolitics and a potential mega-merger of mining giants Rio Tinto and Glencore in focus.

The pan-regional Stoxx 600 index was up 0.33% to 605 at 0854 GMT with all major bourses higher. Britain's mining heavy FTSE 100 was up 0.27%.

Miners Glencore and Rio Tinto confirmed on they were in preliminary talks about a possible combination of some or all of their businesses, which could include an all-share merger - a deal that would create the world's largest mining company valued at $207bn.

Glencore shares surged 8% on the news while Rio stock was down 2.5%.

"Details are thin on the ground, but a ... full combination would create a global leader in multiple industrial metals including iron ore and transition metals such as copper, cobalt and lithium," said Hargreaves Lansdown analyst Derren Nathan.

"But M&A isn't an automatic path to extracting value for investors, with Rio's Australian shares down 6% and Glencore ending Thursday in negative territory. Under the UK's takeover code, the management teams now have until 5th February to outline a compelling case for both sets of shareholders."

Defence stocks rose again as war in Ukraine raged on, US President Donald Trump said he didn't need to abide by international law and ownership of Greenland was preferable to a treaty.

Meanwhile, eyes will be on US jobs data, which could be the first print of clear information afyer the record federal government shutdown last year which hit the accuracy of labour and inflation data for October and November.

There is also the Supreme Court ruling on the validity of Trump's tariff policies.

Oil prices surged as tensions rose within Iran with protests mounting against the Islamic regime, which shut off internet access to stifle the spread of information. Brent crude gained 0.77% to $62 a barrel and West Texas Intermediate up 0.78% to $58.2.

In other equity news, Sainsbury's shares were down 5% as the UK supermarket chain reported a 3.4% rise in underlying sales for the third quarter and reiterated its full-year guidance for profit of more than �1bn, roughly in line with last year.

Reporting by Frank Prenesti for Sharecast.com