Europe close: Basic Resources, Oil&Gas lead gains

European equity markets added to their first quarter tally, with shares in Basic Resources and Oil&Gas spearheading the advance even as the single European currency came under selling pressure on the back of weaker-than-expected readings on inflation in Germany and Spain and hawkish Fedspeak.

At the closing bell, the benchmark Stoxx Europe 600 index was up by 0.51% to 380.46, Germany’s DAX rose 0.44% to 12,556.43 and France’s CAC was higher by 0.41% to 5,089.64.

The Stoxx 600's gauge of Basic Resource stocks tacked on 1.72% to end the day at 423.38 and the Oil&Gas sector index rose 1.27% to close at 313.67.

Meanwhile, Brent crude was up 0.57% to $52.72 per barrel and West Texas Intermediate rose 1.26% to $50.14.

Also boosting sentiment towards oil stocks was Saipem's announcement late on Wednesday that it was set to return to the bond market. Its shares rose 1.36%.

In currency markets, the euro was down 0.24% versus the dollar to 1.0740 and 0.3% lower against the pound at 0.86326 following weak regional German CPI reports early for the month of March published early in the session.

Those figures from the largest German states were confirmed later in the day by a weaker-than-expected preliminary reading on nation-wide consumer prices in the euro area's largest economy. The Federal Office of Statistics revealed that the headline rate of consumer price gains retreated to an annualised pace of 1.6% for March from the 2.2% pace observed in February.

Thursday's price data meant traders should be ready for an undershoot in the euro area-wide CPI numbers scheduled for release on the next day (consensus: 1.8%), Pantheon Macroeconomics said.

Unsurprisingly, the European Central Bank is now hesitant to change its policy statement at its next meeting in April, Reuters reported on Wednesday.

Adding to the selling pressure were 'hawkish' remarks from the presidents of the US Federal Reserve banks of San Francisco and Boston, overnight.

Acting as a backdrop, investors were also digesting the possible repercussions of Britain triggering Article 50 of the Lisbon Treaty which starts a two-year clock on exit negotiations with the European Union on Wednesday. Prime Minister Theresa May is set to introduce the Great Repeal Bill on Thursday, which would convert all EU laws and regulation into British law.

In corporate news, tobacco company Imperial Brands rose 0.42% after saying it remained on target to hit first-half targets, with both revenues and earnings set to be up strongly at the reported level thanks to the weak pound.

Shares in Linde declined 0.41% after worker representatives at the German industrial gas manufacturer said they were against the planned merger with US rival Praxair.