Europe close: Stocks finish lower as oil prices retreat

European stocks closed lower on Thursday, with oil prices retreating and investors left digesting two key pieces of US data that missed consensus forecasts.

At close, the benchmark Stoxx Europe 600 index was down 0.97%, Germany’s DAX was off 0.81% and France’s CAC 40 was 1.34% weaker.

Oil prices managed to pare back some of their earlier losses, however, with West Texas Intermediate last up 1.29% at $38.85 per barrel and Brent crude up 1.41% at $39.82.

Prices had been sinking earlier in the session, following Asia and the US overnight, where oil was down after US official stockpile readings rose for a seventh week of record highs.

The Stoxx 600 oil and gas index fell 1.75% on Thursday.

CMC Markets analyst Jasper Lawler said some end-of-month repositioning and caution ahead of Friday’s US unemployment report had led to mixed trading in Europe, on the final day of what was a very volatile first quarter.

“The sharp reversal in oil prices on Wednesday in combination with a four-week low in the price of copper has prompted some profit taking in UK-listed miners including BHP Billiton and Rio Tinto,” Lawler said.

In corporate news, French telecommunications stocks were under the cosh after Orange and Bouygues Telecom said they have extended the deadline to complete their tie-up to Sunday amid disagreements over the value of the telecoms unit.

Tui rallied after saying overall demand and pricing for holidays has remained resilient in the first half of its financial year. Tui said it has sold 47% of its summer holiday programme, in line with last year, and at 1% higher average selling prices, meaning revenue from the programme has been lifted 3%.

On the data front, US initial jobless claims came in higher than expected in March at 276,000. Consensus was for a reading of 265,000, in line with February’s figure.

The Chicago Purchasing Manager’s Index was better than expected, with a reading of 53.6 for the month of March, against a previous reading of 50.5. Consensus forecast was for 47.6 - a figure above 50 reflects expansion.

Earlier, a flash estimate from Eurostat showed the Eurozone consumer prices index improved in March but remained in negative territory at -0.1%, in line with consensus forecasts.

Eurozone CPI was improved from -0.2% in February. Core CPI, which excludes more volatile prices such as fuel and food, rose to 1.0% from 0.8% the month before, beating predictions for a rise to 0.9%.

The slight improvement will be encouraging for European Central Bank president Mario Draghi, said analyst Naeem Aslam of Avatrade, but the improvement in the data was mainly due to recovery in the oil price.

Figures from Destatis showed German retail sales unexpectedly fell in February. Retail sales were down 0.4% compared with the previous month, missing expectations of a 0.3% increase.

Meanwhile, January’s figures were revised lower to show a 0.1% drop compared with the 0.7% growth initially estimated.

Compared with the same month a year ago, however, retail sales rose 5.4%, which was a much bigger increase than the 2.2% forecast by economists.