Europe close: Basic Resource stocks, Oil&Gas gain at start of quarter

European stocks turned higher on Tuesday as Basic Resource shares gained and oil prices continued to advance, even as geopolitics weighed on investors' minds, with the upcoming Trump-Xi summit in the US ahead at the end of the week and a televised debate of the main contenders in France's presidential elections scheduled for Tuesday evening.

Against that backdrop, the benchmark Stoxx Europe 600 index put on a gain of 0.20% to 380.03, while Germany’s DAX finished 0.21% higher and France’s CAC rose 0.30%.

Front month Brent crude oil futures rose 1.98% to $54.19 per barrel and West Texas Intermediate was up 1.7% to $51.12.

The Stoxx 600's gauge for Oil&Gas shares gained 1.40% to 422.18 and that for Oil&Gas stocks by 0.94% to 314.01.

In currency markets, the euro was 0.10% weaker versus the dollar to 1.0659 and was ahead by 0.35% versus the pound at 0.8574.

US President Donald Trump has already tweeted that he expects his upcoming meeting with Chinese counterpart Xi Jinping to be “very difficult” as they discuss trade and reining in North Korea’s nuclear weapon ambitions.

Investors have shied away from making big bets ahead of the first bilateral summit between the heads of the world’s two largest economies at Trump’s Mar-a-Lago resort in Florida on Thursday.

Elsewhere, the French presidential election was heating up ahead of the first round of voting on 23 April.

Recent polls showed that Socialist candidate Benoît Hamon has fallen behind far-left Jean-Luc Mélenchon since the debate on 20 March. Centrist independent Emmanuel
Macron is above far-right Marine Le Pen, while Mélenchon is converging above François Fillon, who is embroiled in a payroll scandal.

Philippe Waechter, chief economist at Natixis Asset Management, said that if Mélenchon is above Fillon then out of the top three, two are against European institutions, which is paradoxical as 71% of the French people want to keep the euro and to stay in the European Union.

Mélenchon has not said that he wants to take France out of the EU, like Le Pen, but is hostile to European institutions and wants to reform the bloc.

On the data front, Eurozone retail sales in February rose 0.7% month-on-month, after a weak start to the year, beating the 0.5% consensus estimate.

This was an acceleration on January's performance, which was revised up to a positive 0.1% growth from the initial -0.1% reading.

Annual growth over February last year was lifted to 1.8% from the revised 1.5% the previous month and again higher than the consensus forecast of 1.0%.

Germany, up 1.8%, and France, up 0.7% were driving forces, while Portugal's 3.1%, Croatia's 2.8% and Slovenia's 2.3% rises led the way.

In corporate news, BNP Paribas fell 0.83% after the French bank said it will buy online retail banking service Financiere des Paiements Electroniques, while ABB rose 0.3% after the Swiss-Swedish multinational bought Austria’s Bernecker + Rainer Industrie-Elektronik.

Distribution giant Bunzl gained 1.22% after saying it has bought two safety businesses in the US and Italy for an undisclosed sum.

Central and Eastern European low-cost airline Wizz Air added 1.28% after it reported a 19% rise in passenger numbers in March as the load factor ticked up to 90.4% from 86.3% in March.