Europe close: Bearish US data caps Dax gains near all-time highs

European equities wavered on Wednesday despite Eurozone services data coming in at a near six-year high, as weaker than expected US service sector data and figures showing an unexpected build in oil stockpiles in the States dragged the main indices lower.

The benchmark Stoxx Europe 600 index ended the day up by 0.02% at 380.09, while Germany’s DAX was down 0.53% to 12,217.54 and France's CAC was down 0.18% to 5,091.85.

Nonetheless, the latter two were still trading close to their record highs.

Autos was the weakest sector in the Stoxx 600, with a gauge for the sector retreating 1.10%, but it was another linked to Oil&Gas shares that saw the biggest intraday reversal, ending the session up by 0.53% at 316 versus an intraday high of 320 as it attempted to break a key level of technical resistance.

Meanwhile, Brent crude rose 0.46% to $54.42 per barrel and West Texas Intermediate was up 0.37% at $51.22, with supply disruptions in Libya and Nigeria helping to offset bearish inventory figures from the US Department of Energy, according to analysts.

Ninety minutes before the closing bell, the US ISM institute said its popular service sector purchasing managers index retreated from a reading of 57.7 for February to 55.2 in March (consensus: 57.0), weighing on sentiment.

Meanwhile, in currency markets, the euro was off by 0.29% versus the dollar at 1.0650 and down 0.43% to 0.8541 against the pound, which was boosted by better-than-expected UK services data.

On the data front, IHS Markit's final Eurozone composite purchasing managers' index - which measures activity in both the services and manufacturing sectors - rose to 56.4 from 56.0 the month before, but was below the flash estimate of 56.7.

A reading above 50 signals expansion, while a reading below indicates contraction.

The final Eurozone services business activity index came in at 56.0 in March, down from the flash estimate of 56.5 but up from February's 55.5.

France and Germany accounted for a big chunk of the growth, with their PMIs both coming in at 70-month highs.

Elsewhere, investors were mulling Tuesday's televised debate for France’s presidential election, where independent centrist Emmanuel Macron and far-right Marine Le Pen clashed over the European Union and the euro.

An Elabe poll for the second round on 23 April showed that far-left Jean-Luc Melenchon, who has been making ground recently, won Tuesday’s debate with 25% of people asked saying that he performed best, followed by Macron in second place with 21% and Le Pen in third with 11%. A separate Opinionway poll had Melenchon, Macron and
Fillon all tied on 18% followed by Le Pen with 11%.

Analysts at Deutsche Bank said that the results of the polls "would suggest that the debate has done little to further Le Pen’s chances with the Elabe pollster highlighting that the fierce competition on the anti-European issues contributed to Le Pen’s mediocre score".

"As we said following the first debate though, Hillary Clinton was seen as the comfortable winner in all the US Presidential debates so it’s worth taking these results in context".

Le Pen and Macron are expected to make it to the final run-off on 7 May with Macron the eventual victor.

After European markets close, investors will also be looking out for the latest FOMC minutes at 1900 BST and a meeting between US president Donald Trump and Chinese counterpart Xi Jinping on Thursday.

In corporate news, Commerzbank rose 2.94% following reports that the German lender is planning to cut 7,800 jobs as part of a restructuring plan.

French IT consultancy CapGemini gained 2.04% after analysts at JP Morgan increased its price target to €100 from €90 and reiterated an ‘overweight’ rating.

Miners and oil stocks were the standout gainers on the FTSE 100, led by BHP Billiton and Rio Tinto, which were up 1.75% and 0.11%, respectively. Energy shares were initially boosted by a rise in oil prices after the American Petroleum Institute reported a draw of 1.8m barrels in US crude oil inventories last week, versus expectations of a 435,000 draw.

Syngenta added 0.92% after US antitrust officials gave the green light for China National Chemical Corp’s acquisition of the Swiss pesticide maker providing ChemChina sells three crop chemical businesses.