Europe close: Stocks track bounce in oil futures, end higher

European stocks closed firmly in the black in a volatile day of trading as crude oil futures climbed back from early losses, possibly on the back of reports of possible disruptions to supplies from Kuwait as a result of a strike among public sector workers on Sunday.

Hence, investors continued to mull over Sunday’s meeting of oil producers in Doha, which did not result in the production freeze many had been expecting, but were unexpectedly also left to digest the news out from Kuwait.

The benchmark DJ Stoxx Europe 600 index was higher by 0.41% to 344.20, while Germany’s DAX advanced 0.68% to 10,120.31 and France’s CAC 40 up by 0.26% to 4,506.84.

As of 17:12BST West Texas Intermediate was down 1.31% to $39.84 a barrel while Brent crude was off by 0.30% at $42.96, having earlier sported losses of up to 6%.

In parallel, the Stoxx 600 Oil&Gas sub-index ended the day down by just 0.20% at 269.69 points, having hit an intra-day low of 259.36.

“While the oil price may be sharply lower (again), it has pared its knee-jerk losses and traders appear to be coming round to the understanding that although no deal came out of the weekend's Doha oil production freeze meeting, we shouldn't really have expected anything given the strong stances by Iran ('not while we ramp up post sanctions') and Saudi Arabia (not without Iran),” said Mike van Dulken, head of research at Accendo Markets.

“Investors are also reviving some of last week's risk appetite that came about from solid China data, US banks’ Q1 results not being as bad as expected and some soft US data bolstering the US Fed's 'gently does it' message on policy normalisation.”

Sunday’s meeting of oil producers in Doha, Qatar, failed to result in the production freeze deal market participants had been hoping for.

Ahead of the summit, investors had been expecting the oil producers, which include Saudi Arabia and non-OPEC Russia, to agree to cap production at January levels after Russia, Saudi, Qatar and Venezuela said in February that they would if other producers joined them.

However, Iran – which had already made it clear it would not freeze or cut production until it recovered a market share similar to what it had before sanctions were imposed – did not send a representative to the meeting.

Saudi Arabia, meanwhile, insisted it would not freeze production if Iran did not participate.

In corporate news, energy supplier Centrica was on the back foot after it said it had lost another 1.5% of its home energy accounts in the first quarter and plans to cut around 3,000 jobs this year.

Spain's Caixabank was 2.99% weaker after it launched a second full takeover bid for Portugal's BPI, that followed a failed attempt in 2015.

Chip designer ARM Holdings was under the cosh amid reports Apple - one of its biggest customers - will continue its reduced production of iPhones due to sluggish sales. At the same time, a downgrade to ‘hold’ from ‘buy’ from Jefferies weighed on the stock.

On the upside, Reckitt Benckiser was a little higher after reporting a rise in first-quarter revenues and affirming its full-year forecasts.

Travel operators Thomas Cook and TUI were both on the front foot after Berenberg upgraded its ratings on the stocks.