Europe close: Greek stocks pace gains

Stocks in Europe were near their best levels of the day following stronger-than-expected inflation data out overnight in China, figures showing an increase in monthly passenger-vehicle sales in the Asian giant and signs of a possible debt-relief deal for Greece.

Europe's benchmark DJ Stoxx 600 finished 0.91% higher to 337.28, alongside gains of 0.65% to 10,045.4 for Germany's Dax and an advance of 0.36% to 4,338.21 for Paris's Cac-40.

The Stoxx 600 sector gauge for Automobiles&Parts jumped 1.78% to 485.73 points while other sub-indices tracking bank and oil&gas stocks rose by 1.63% and 1.44% each.

The Athens Stock Exchange's General Index rose 3.15% to 629.29 points, pacing gains on the Continent and yields on the country's benchmark 10-year sovereign debt dropped by 72 basis points to 7.71% - their year-to-date low.

During the previous session euro area finance chiefs reached appeared to reach an understanding regarding the need to offer Greece debt relief.

“This is the first time there is clarity on debt relief as well as a clear signal that Eurozone member states are willing to act on Greek debt. Additionally, the allusion to lower long-term primary surpluses is arguably not only macro-economically sensible but a way to satisfy the political desideratum of keeping the IMF involved in the Greek bailout,” UBS strategist Lefteris Farmakis said in a research note sent to clients.

Acting as a backdrop, euro/dollar was largely unchanged, edging down by 0.05% to 1.1377. In parallel, front month Brent crude futures were up by 3.7% to $45.31 per barrel on the ICE.

Deflation eases in China

Consumer prices in the People's Republic of China held steady at 2.3% year-on-year in April, for a fourth consecutive month, as expected by analysts.

However, factory gate deflation decreased from -4.3% year-on-year in March to 3.4% in April, as energy prices rebounded.

"Following 26 straight months in negative territory, the m/m change in producer prices was positive in March and April, which should ease concerns over deflation," Julian Evans-Pritchard at Capital Economics said in a research report sent to clients.

Weak French IP

The move higher in equities came despite weaker than expected readings on industrial production out of Germany, France and Italy.

Output in Germany, arguably the Eurozone's growth engine, shrank by 1.3% month-on-month in March, exceeding forecasts for a 0.2% dip by a wide margin.

Nonetheless, over the first quarter of the year as a whole output jumped by 1.8%, rebounding from a 0.3% fall in the final three months of 2015, Pantheon Macroeconomics said.

"This points to a strong GDP print later this week, and suggests that the consensus’ prediction of an upbeat 0.6% quarter-on-quarter is within reach."

French industrial production shrank by 0.3% month-on-month in March (consensus: 0.7%).

That was consistent with a quarterly drop for industrial output of 0.6% and a possible downward revision in the rate of growth for first quarter gross domestic product from 0.5% to 0.4% in terms of quarterly rates of change, analysts at Barclays said.

In Italy, industrial production was flat over the month in March but 0.7% higher over the first quarter as a whole.
Credit Suisse on track with cost-cutting

Investment bank Credit Suisse led the upside in the corporate space.

The Swiss outfit reported a 302m Swiss franc loss for the first quarter of 2016 - its first loss since 2008 - but nevertheless besting the 344m franc loss estimated by analysts, although it meant a sharp drop from the 1.05bn francs recorded in the comparable period of a year ago.

Helping the shares along, chief Tidjane Thiam expressed confidence in his ability to deliver the cost cuts promised for the year ahead.

Stock in Thyssenkrupp ended the session flat even after the company slashed its full-year forecasts because of the drop in prices for its products, including steel, which were deeper and longer than it had anticipated.

Danish jeweller Pandora A/S rocketed after the company reported earnings that beat analysts's estimates and boosted its full-year forecast.