Europe close: Shares bounce back for a second day

European stocks racked up healthy gains on Wednesday as a bounce in oil prices and better-than-expected Chinese trade figures lifted the mood.

The benchmark Stoxx Europe 600 index finished up by 0.41% and France’s CAC 40 by another 0.30%, while the Dax closed 0.25% lower.

The latest trade out of China showed exports fell 1.4% year-on-year in December in US dollar terms, which was better than the 8% drop expected by economists.

Meanwhile, imports declined 7.6%, beating expectations for an 11% slide.

"The latest trade data are a challenge to those who believe that China’s export sector needs renminbi depreciation to compete or that China’s economy is continuing to slow.Today’s data underline that export competitiveness is not a major concern."

“Still it needs to be seen if one set of good numbers will manage to bring a shift in sentiment about,” Mark Williams, chief Asia economist at Capital Economics said in a research note sent to clients.

In the commodities space, front month Brent crude futures fell 1.28% to $30.48 on the ICE despite a forecast from the US Department of Energy that the oil market would not begin to balance until the third quarter of 2017.

The gains helped to push the Stoxx 600 oil and gas index up 1.36%.

On a very dour note, Societe Generale stategist Albert Edwards predicted the S&P 500 would fall to 550 points in the current valuation-bear cycle as the effects of the Fed's quantitaive easing on emerging markets unwound.

In corporate news, Sodexo rose after the food services and facilities management company posted first quarter organic revenue growth of 4.7%.

Dutch insurance group Aegon surged after announcing a €400m share buyback programme and lifting its 2015 dividend.

Elsewhere, Banco Popolare and Banca Popolare di Milano rallied following a report the banks were close to agreeing a deal on a merger.

In London, supermarket retailer Sainsbury's nudged up after its third quarter sales were better than expected and the company said the second half was likely to see an improvement.

Macroeconomic news was a little less cheery, however.

Figures released by Eurostat showed industrial production fell by 0.7% month-on-month in November from October.

The drop was steeper than the 0.3% slip expected by economists and marked the biggest month-on-month drop since August 2014.

On the year, production was up 1.1%, falling short of expectations for a 1.3% increase.