Europe close: Stocks jump as oil price rebound continues

European stocks reversed earlier losses to trade a little firmer on Tuesday as oil prices turned higher, although losses for luxury goods stocks kept a cap on gains.

The benchmark DJ Stoxx Europe 600 index finished the day sporting gains of 1.77 points or 0.53%, Germany’s DAX was 0.81% higher and France’s CAC 40 rose 0.77%.

At the same time, oil prices reversed earlier losses to trade higher amid growing hopes that Sunday’s OPEC and non-OPEC meeting in Doha will lead to a production freeze.

West Texas Intermediate shot up 3.904% to end the day at $44.57 a barrel and Brent crude was 3.93% higher to $44.57 This helped to push the Stoxx 600 oil and gas index up by another 1.64%.

“The meeting on Sunday comprises producers of around three quarters of global output and if a deal is agreed on a production freeze or even a cut, the latter of which is very unlikely, it could be the catalyst that drives the next rally in oil and take it back above $50 for the first time since November,” said Oanda’s Craig Erlam.

“There are a lot of obstacles to such a deal being done though, not least Iran’s determination to return to pre-sanctions production levels, which makes me sceptical that it can be achieved.”

In corporate news, Anglo American surged after its diamond unit De Beers said it generated $660m from provisional rough diamond sales in the third sales cycle of 2016.

In Italy, bank stocks were stronger again after the country’s financial industry approved a government-backed plan to set up a rescue fund. The Atlante fund - made up by private money - will buy up shares and bad debt in struggling banks.

Swiss fragrance maker Givaudan was on the front foot after posting a solid rise in first quarter sales.

On the downside, luxury goods company LVMH traded lower after its first quarter results missed expectations, with London-listed peer Burberry also in the red.

AstraZeneca was under the cosh after Goldman Sachs downgraded the stock to ‘sell’ from ‘neutral’ saying current long-term estimates were overly optimistic and the valuation was high.

Whitbread was also in the red after announcing the departure of Christopher Rogers from the posts of managing director of coffee shop chain Costa and executive director of the firm’s board.

Earlier, figures from Destatis showed German consumer prices rose 0.8% in March from the previous month, in line with the initial estimate and expectations.

Consumer prices were up 0.3% compared with March 2015, having been flat in February, in line with consensus and the initial estimate.