Europe close: Basic resources lead markets higher

European stocks finished Wednesday healthily in the black, with basic resources among the leaders as investors were buoyed by stronger Chinese trade data.

At close, the benchmark Stoxx Europe 600 index was up 2.35%, Germany’s DAX was 2.71% firmer and France’s CAC 40 was up 3.32%.

Oil prices were under pressure, however, with investor worries growing ahead of Sunday’s producer meeting in Doha. Comments from Saudi oil minister Ali al-Naimi, published in al-Hayat, fueled concerns, as he repeated that an outright ban was not an option for his country.

West Texas Intermediate was last down 0.91% at $41.79 per barrel, and Brent crude was down 1.04% at $44.23 per barrel.

“The apparent turnaround in China’s economy, the rise in oil prices as well as a more cautious Federal Reserve have removed the major concerns that led to the beginning of the year sell-off,” said CMC Markets market analyst Jasper Lawler.

“Italy’s Economy Minister saying the new rescue fund won’t be blocked by the EU, bigger than expected profits at JP Morgan, and the oil price helping to subside fears over non-performing loans to the energy sector has improved the outlook for banks. Asian-focused Standard Chartered gained over 9% on signs of a turnaround in China’s economy while recently beaten-down Deutsche bank shares gained over 8%,” he added.

The Stoxx 600 basic resources index surged 6.88% after data showed China’s yuan-denominated exports rose 18.7% in March compared to the same month a year ago.

Yuan-denominated imports, meanwhile, fell 1.7% on the year compared with an 8% decline the previous month and giving a trade surplus of 194.6bn yuan.

In dollar terms, exports grew 11.5% to $160.8bn after dropping 25% in February, beating consensus forecasts for a 10% rise.

Still, analysts warned that the improvement was partly down to a seasonal upturn.

With the focus on China, weaker-than-expected Eurozone industrial production figures for February were largely shrugged off by the markets..

Output was down 0.8% versus expectations of a 0.7% drop. On the year, production was 0.8% higher, missing economists’ forecast of a 1.2% increase.

In corporate news, insurer AXA was on the front foot amid reports the company was in talks to sell most of its UK life insurance and wealth investment units.

On the downside, supermarket chain Tesco was sharply lower after saying it swung to an annual pre-tax profit of £162m following a record loss the previous year but issuing a cautious outlook statement.

Shares in Mr Kipling and Oxo owner Premier Foods tumbled in London as US-based McCormick & Co. said it did not intend to make an offer for the company.