Europe close: Stocks edge higher ahead of Yellen speech

European stocks ended Tuesday in the black, though they were still off earlier highs as the markets focused on the US and a speech from Federal Reserve chair Janet Yellen.

At close, the benchmark Stoxx Europe 600 index was up 0.45%, Germany’s DAX was 0.37% higher and France’s CAC 40 was 0.85% firmer.

At the same time, oil prices were well and truly in the red. West Texas Intermediate was down 3.69% to $37.99 a barrel and Brent crude was off 3.55% at $38.89.

“The gains of the morning session have, by and large, disappeared this afternoon, and once again crude oil is one of the chief culprits. Investors had previously hoped that an OPEC meeting would fix further production freezes, but those hopes are now being dashed,” said Chris Beauchamp, senior market analyst at IG.

“Iran, still revelling in its new crude output, has also indicated that it does not intend to join in any cap on production. As a result, oil prices are sharply lower, putting a strong end to the month for equities in serious jeopardy."

In corporate news, RSA Insurance was on the front foot on the back of a positive research note from Deutsche Bank, which upped its target price on the stock.

ENI was in the red after La Repubblica reported that the Italian energy company was discussing the sale of a 20% stake in Egypt's Zohr gas field to Russia's Lukoil.

Pharmaceuticals giants GlaxoSmithKline and AstraZeneca were both higher after drug approvals in Japan.

Low-cost carrier EasyJet flew higher after Bank of America Merrill Lynch upgraded the stock to ‘buy’.

Shares in AG Barr reversed earlier losses to edge higher, after the London-listed drinks maker posted a rise in full year profit but a dip in revenue.

Banco Popolare was weaker after its chief executive told Il Sole 24 Ore over the weekend that half the €1bn capital required for it to merge with Banca Popolare di Milano could be raised through a rights issue and the other half through direct placements to institutional investors.

In US data, house prices in major metropolitan areas rose 5.7% in January according to a fresh release from S&P/Case-Shiller. The rise was in line with recent gains, with inventory remaining low.

The country’s consumer confidence also rebounded in March, with the Conference Board’s reading of 96.2 up from February’s 94.0.

It “suggests that the rebound in stock markets more than offset the impact of higher gasoline prices in recent weeks,” noted Capital Economics US economist Steve Murphy.

Yellen’s speech at the Economic Club of New York Luncheon was due at 1620 GMT. Investors were set to scrutinise Yellen’s words for any policy clues, particularly after the hawkish comments last week from Fed officials.

However, Societe Generale strategist Kit Juckes did not seem to think the speech would provide too many hints.

“Net result, she won’t be much help and we may wait for Friday for economic clues.”