Europe close: Stocks rise even after German GDP misses forecasts

European equity markets finished at their best levels of the day as oil prices rose and German investor confidence improved, although growth figures for Europe's largest economy fell short of expectations.

The benchmark Stoxx Europe 600 was up by 0.27%, France’s CAC 40 gained 0.62% and Germany’s DAX was off 0.39%.

In London, the FTSE 100 was boosted by a weaker pound as data from the ONS showed the consumer price index fell to 0.9% in October, compared to 1% in September and versus analysts' expectations of an increase to 1.1%.

Meanwhile, oil prices snapped back from three sessions of losses amid hopes that OPEC will agree a production cut at its meeting later this month. West Texas Intermediate was up 4.4% to $45.32 a barrel and Brent crude was up 4.1% to $46.32.

A 'flash' estimate from Eurostat showed Eurozone economic growth held steady in the third quarter. Gross domestic product expanded at a 0.3% pace, unchanged from the second quarter, as expected.

Meanwhile figures released earlier by Destatis showed German GDP slowed to a 0.2% quarter-on-quarter clip over the three months to September, missing expectations for growth of 0.4%.

However, an index of German investors' confidence improved more than expected in November, rising to 13.8 points from 6.2 points in October, comfortably beating analysts’ expectations for a reading of 8.1, according to the ZEW Center for European Economic Research.

The current situation index declined to 58.8 in November from 59.5 the month before, missing expectations for a reading of 61.5.

“An upbeat headline, indicating that German and EZ investors remain upbeat about the prospects of higher equity returns despite higher political uncertainty. More confident investors are good for the economy, at the margin, but we’re not certain that these data can be taken at face value.

"The range of potential outcomes in the political sphere currently is enormous, and we think investor sentiment will be very sensitive to changes in the story,” said Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics.

In corporate news, budget airline EasyJet flew higher as it reported a 27.9% drop in full-year profit to £495m that was in line with the guidance it gave in October, as it took a hit from terrorist attacks and as the UK’s decision to leave the European Union made the euro more expensive for British travellers over the summer.

Nokia slid after it reported that net sales in its key networks business were set to drop in full-year 2017.

Elsewhere, Societe Generale turned higher following reports that France’s finance ministry has kicked off a process to recoup €2.2bn worth of tax deductions the bank received after losses caused by rogue trader Jerome Kerviel.

Vodafone reversed early gains after better-than-expected first-half results, while Land Securities rallied after reporting a 4.5% jump in first-half revenue profit to £192.5m.

Tesco powered ahead as the latest figures from Kantar Worldpanel for the 12 weeks to 6 November 2016 showed the group has grown at its fastest rate in three years, with sales increasing by 2.2%.