Europe close: Stocks end higher for the month despite oil price drop

European stocks ended the session on a mixed note - but higher on the month - with a late bout of selling sending all of the region's main indices lower as crude oil futures took a hit.

The benchmark Stoxx 600 drifted lower by 0.13% to 389.99, alongside a gain of 0.13% for Germany's Dax to 12,615.06 while the Cac-40 slipped 0.42% to 5,283.63.

Milan's FTSE Mibtel also ended the month on a down note, slipping 0.40% to 20,731.68.

"Markets in Europe have also had fairly decent month, and while they have been somewhat mixed today, they still look on course to post a fourth successive positive month," commented CMC Markets's Michael Hewson.

Indeed, all of the above indices ended the month of May with positive returns, although Brent futures did not.

As a group, oil&gas firms on the Stoxx 600 dropped 1.06% as the price of Brent lost 3% on Wednesday (and for the month) amid news that Libyan oil production was back at more than three-year highs.

Basic Resource firms also did poorly, as Chinese traders back from a two day bank holiday sold iron ore and steel rebar futures heavily overnight.

The Stoxx 600's Basic Resources subindex fell 2.14% to 388.11.

On the economic front, euro area unemployment for April came in stronger than forecast, even as the latest readings on inflation within the single currency bloc appeared to validate the 'dovish' stance recently espoused by European Central Bank boss Mario Draghi, according to analysts.

Figures from Eurostat revealed that unemployment in the Eurozone fell from a downwardly revised rate of 9.4% for March to 9.3% in April (consensus: 9.4%).

Joblessness for March had originally been pegged at 9.5%.

In parallel, Eurostat reported that price pressures decelerated more quickly than anticipated.

Those figures showed that momentum in underlying inflation was weak, according to Fabio Fois at Barclays Research.

The year-on-year rate of increase in the euro area's consumer price index retreated from a 1.9% clip in May to 1.4% for April (consensus: 1.5%).

Core prices also missed forecasts by a tenth of a percentage point, with their rate of advance slowing from 1.2% to 0.9%.

"Net out the calendar-led volatility services inflation spike due to the different Easter timing this year compared to last, and core inflation returned to a level reached at the start of the year and was only marginally above levels reached in May 2016," Fois said.

Commenting on Wednesday's price action in markets, Michael Hewson, chief market analyst at CMC Markets UK said: "Recent weakness in European markets has been a little tough to square with the continued improvement in economic data that has come out of Europe since the beginning of the year.

"Strong economic surveys from Germany, France, Italy and Spain suggest that the improvements seen in Q1 will be carried into the rest of the first half of this year, particularly since most of the political risk is now in the rear view mirror."

Still on the economic calendar for Wednesday, the Chicago NAPM's manufacturing sector purchasing managers' index for May was set for release at 14:45 BST, followed by the US central bank's so-called 'Beige book' at 19:00 BST.

Shares in Germany's flag carrier Deutsche Lufthansa edged higher after chief Peter Garber told Handelsblatt its cargo arm had made an "encouraging" start to the year.

Stock in E.On was up on the heels of a report that it had taken Goldman Sachs on board to explore options for a sale of its remaining stake in Uniper.