Mining stocks rise after reports of Glencore, Rio Tinto merger talks; European markets resume rally

European markets opened in positive territory on Friday, setting the region’s stocks up for a weekly rise following one of the best trading sessions in four months on Wednesday.

The pan-European Stoxx 600 index was 0.3% higher shortly after the opening bell, with most sectors and all major bourses edging higher. Mining stocks led the gains, with the sector up more than 1% after Bloomberg reported Glencore had been in talks with Rio Tinto to explore the industry’s largest ever merger. The talks are reportedly no longer active.

Glencore shares were around 2% higher at 8:16 a.m. London time.

A further data release from Britain’s Office for National Statistics on Thursday showed that the economy returned to growth in November, with gross domestic product rising 0.1% on a monthly basis after two months of economic contraction. While the data ended the U.K.’s two-month economic downturn, it came in below the 0.2% growth expected by economists polled by Reuters.

It was followed by more disappointing data on Friday, when the ONS estimated the U.K.’s December retail sales had fallen 0.3% on a month-on-month basis. Economists polled by Reuters had been anticipating a 0.4% rise in sales volumes from the previous month.

The data out of the U.K. this week has fueled hopes that the Bank of England will resume interest rate cuts at its next monetary policy meeting in February. Traders are overwhelmingly pricing in a 25-basis-point cut from the central bank at its upcoming meeting, according to LSEG data.

Elsewhere in the region, the European Commission will finalize figures on euro area inflation on Friday. Preliminary data released earlier this month showed that annual inflation in the euro zone rose to 2.4% in December — the bloc’s third consecutive monthly rise.

Spain — one of Europe’s fastest growing economies, according to the OECD — is set to publish import and export figures on Friday morning.

Overnight in Asia, stocks were mixed as investors reacted to China’s fourth-quarter GDP update, which came in above expectations.

On Wall Street, stock futures edged higher, with indexes poised to end the week higher despite some volatility in recent days.

—     CNBC’s Lisa Kailai Han and Lee Ying Shan contributed to this European markets update.