Europe close: Investors get reprieve from selling

The selling pressure on European stocks abated on Wednesday after they endured their worst session in five months a day before on investors' concerns ahead of the first round of voting in the French elections.

At the closing bell the Stoxx Europe 600 index was up 0.24% at 377.24, as Germany’s DAX edged higher by 0.13% to 12,016.45 and France’s CAC added 0.27% to 5,003.73.

To take note of, Bank of America-Merrill Lynch's monthly Fund Managers Survey revealed that professional money managers were shifting towards European stocks despite the looming electoral contest in the Continent's second-largest economy. The sentiment was echoed by a bullish note on Continental European stocks out of strategists at Credit Suisse.

Meanwhile, Brent crude futures retreated 1.63% to finish at $54.01 per barrel after the release of US oil inventory data which revealed a smaller than expected drop.

The frontrunners in the French contest, centrist Emmanuel Macron and far-right Marine Le Pen, are expected to make the run-off on 7 May, but far-left Jean-Luc Mélenchon and Conservative François Fillon are gaining ground quickly in a tight-run race.

Chris Beauchamp, chief market analyst at IG, said: "Both Le Pen and Mélenchon want to put France's euro membership to a popular vote, and both are opponents of the EU project, at least in its current form. A possible French exit from the single currency, and potentially even the EU, will likely destabilise markets, at least in the short term."

Speaking after the close of markets across the Continent, European Central Bank Governing Council member Benoit Coeure sounded a cautious note on growth prospects within the single currency bloc.

"In the very short term, Q1 and Q2, there are some upside risks," Praet said according to a report from Reuters.

"But looking beyond, I see downside risk prevailing."

The euro ended the day slightly lower versus the dollar at 1.0710 but 0.24% higher against the pound at 0.8375.

On the data front, the Eurozone's trade surplus rose to €19.2bn in February from €15.7bn in January, above the €18bn consensus forecast.

The group of 19 countries exported goods worth €170.3bn to outside the currency area and imported goods worth €152.6bn. Exports rose 0.4% from January and imports fell 1.7%.

In corporate news, Associated British Foods was up 1.29% after it lifted its dividend and said profits surged in the first half of the year as the sugar business benefited from higher prices.

Burberry fell 7.94% after the luxury fashion brand posted a drop in underlying revenue in the second half as an "exceptional" performance in the UK was offset by efforts to improve brand positioning in the US and in the beauty business.

Carmaker Volkswagen gained 2.16% after data showed that car registrations in Germany increased 11.4% in March.

L'Oreal edged higher by 0.17% after the beauty company reported better than expected growth in first quarter like-for-like sales due to strong demand in Asia and North America.

Heineken added 1.15% after the Dutch brewer reported an 11% rise in first quarter profit and beat revenue expectations.