Europe close: Stocks end on mixed note amid jump in crude oil futures

European shares finished on a mixed note against the backdrop of a sharp jump in crude oil futures after an unexpected decision by the Organisation of Petroleum Exporting Countries to cut output, which in turn sparked fears of renewed inflation.

"It has been a busy start to Q2, as markets scramble in the OPEC+ production cut. Having finished the quarter with signs of slowing inflation, investors are now scrambling to react," said IG chief market analyst Chris Beauchamp.

"The FTSE 100 has enjoyed one of the stronger starts to the year, kept in positive territory by BP and Shell, which have added more than 40 points to the index."

The pan European Stoxx 600 drifted lower by 0.12% to 457.30, while the oil-heavy UK FTSE 100 outperformed with a 0.54% rise.

Spain's Ibex 35 on the other hand slipped 0.81% to 9,157.40, although the French Cac-40 ended up 0.32% at 7,345.96.

Euro/dollar meanwhile gained 0.43% to 1.0886, even as front-dated Brent crude oil futures jumped 4.83% to $84.72 a barrel on the ICE.

At the weekend, oil cartel OPEC+ slashed production by more than 1 million barrels a day.

Sentiment was also hit by a China manufacturing survey for March showing an unexpected fall in output.

In European economic news, eurozone manufacturing activity fell to a four-month low in March, according to data released on Monday.

S&P Global’s final eurozone manufacturing purchasing managers’ index declined to 47.3 from 48.5 in February. A reading below 50.0 indicates contraction, while a reading above signals expansion.

S&P Global said much of the month-on-month drop was due to the suppliers’ delivery times index - which is inverted in the calculation of the headline PMI - surging to a survey record. It noted that the key sub-components of the headline indicator measuring factory health such as output, new orders and employment were little changed on the whole.

The news boosted major oil producers, with BP, Shell, Aker BP, Equinor, Galp and ENI all higher.

On the downside, airlines all fell on the prospect of higher costs and reduced demand if inflation was refuelled. British Airways owner IAG, along with low-cost rivals Ryanair and Wizz Air felt the pinch.