Europe close: Stocks and oil futures bounce back

European stocks recovered a tad of their recent losses on Thursday, bouncing back after the heavy losses inflicted during the previous session, after European Central Bank chief Mario Draghi sounded a dovish note and a top Chinese official said weakness in the Yuan was not in the country's best interests.

The benchmark Stoxx Europe 600 index was up 1.61%, Germany’s DAX was 1.94% firmer and France’s CAC 40 was up by another 1.97%.

Following the previous session's carnage in markets, some pundits suggested that investors might have 'thrown in the towel' on Wednesday - in what many term a 'capitulation' - which might set the stage for at least a short-term bounce.

Nonetheless, and despite the positive tone, there were also many market analysts who remained sceptical.

“Any rallies in equity markets this year have been very short-lived and seized upon by investors as an opportunity to exit long positions or short the market,” said Craig Erlam, senior market analyst at Oanda.

“Given how gains today are dwarfed by Wednesday’s declines, I see little reason to believe this is going to be anything other than a dead cat bounce. The market looks very bearish right now and confidence has been shattered by the repeated large sell-offs.”

Meanwhile, SpreadCo analyst David Morrison said: “At the time of writing, all the major indices are in positive territory. On the face of it this is quite encouraging, particularly as crude is still trading near its 2003 lows. But once again, what looks like the beginning of a recovery in equities could easily turn out to be nothing more than a dead-cat bounce.”

At the press conference following the European Central Bank’s rate announcement, Mario Draghi said euro area rate-setters might revisit their policy settings when they next met, in early March.

"He went further than we expected and we now believe that the new package that we predicted for June could be presented in March, including another depo rate cut and an adjustment of QE, but it will likely depend on developments between now and March," economists at Barclays said in a research note sent to clients.

Speaking earlier in the day, on the sidelines of the World Economic Forum, Fang Xinghai, the vice-chairman of China's securities regulator, said there was no "basis" for China to desire a weaker currency.

“Currency depreciation is not in the interest of China. It’s not good for domestic consumption," he said.

In corporate news, education publisher Pearson surged to the top of the FTSE 100 despite warning over profits, as investors welcomed the company’s new restructuring programme.

Elsewhere, Deutsche Bank fell sharply after saying it expects to post a 2015 net loss of around €6.7bn on the back of writedowns and litigation charges.

Meanwhile, oil prices bounced back too despite weekly US oil stockpile figures showing a 4.0m barrel build, possibly due to oversold conditions in the market.

As of 17:21GMT front month Brent crude futures jumped 5.81% to $29.60 per barrel and West Texas Intermediate up by another 5.4%.

Economic data released Stateside was mixed, with the latest weekly unemployment claims figures coming in ahead of economists' estimates but not by a wide margin. In parallel, the closely-followed Philly Fed index appeared to point to a stabilisation in the sector.