Europe open: Shares rally as Leonardo US deal provides a lift

European stocks continued to rally on Tuesday, taking their cue from Asia with the US closed overnight for a holiday.

The pan-European STOXX 600 index rose 1.1% in early deals after the lows of last week as European, Swiss and UK interest rates all rose.

“Left to their own devices following a public US holiday, global markets made a tentative recovery from the recent unrelenting pressure, even if such relief has tended to be brief over recent months,” said Interactive Investor head of markets Richard Hunter.

“At this early stage, US futures are also pointing higher to the reopening of trade later, although the pervasive sense of caution remains.”

In equity news, shares in Italian defence company Leonardo topped the Stoxx on news it had agreed to merge its US unit with RADA Electronic Industries.

French industrial gas company Air Liquide climbed after striking its largest power purchase deal with Swedish utility Vattenfall.

French planemaker Airbus rose after British airline easyJet said it would buy 56 Airbus A320neo aircraft.

Ocado fell after the online supermarket said it had raised £575m in a share placing to fund its expansion. Just over 72.3m new ordinary shares were placed at 795p per share, with existing and new institutional investors. The placing price represents a discount of around 9.4% to the closing share price on Monday.

The online supermarket also raised an additional £3m selling shares to management and in an offer to retail investors.

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