Europe midday: Stocks fluctuate after recent gains; Brent crude breaches $50 a barrel

European equities wavered on Thursday following two days of gains amid weakness in the banking sector, although stronger oil prices lent some support as Brent crude breached the $50 a barrel mark for the first time since November.

At midday, the benchmark Stoxx Europe 600 index was flat, Germany’s DAX was 0.5% higher and France’s CAC 40 was up 0.4%.

“Given that we have two major risk events for the markets in the coming weeks –EU referendum in the UK and possible rate hike from the Fed - I do wonder though whether this rally has the legs to build significantly on the moves of the last couple of days,” said Craig Erlam, senior market analyst at Oanda.

Oil prices advanced after data from the Energy Information Administration on Wednesday showed US crude supplies declined by 4.2m barrels for the week ended 20 May, compared with expectations of a 2.5m drop.

West Texas Intermediate was up 0.7% to $49.90 a barrel while Brent crude was 0.9% firmer at $50.17.

FXTM’s chief market strategist, Hussein Sayed, said: “Whether the bullish trend still has legs or if an imminent correction is due remains a wild guess, as speculators over-exaggerate on the upside as they did recently on the downside. However, OPEC’s meeting on June 2 remains to be the key risk factor in the short term as markets are eager to know whether an agreement on a potential oil freeze will see the light.”

In corporate news, Banco Popular tumbled after the Spanish bank announced plans to raise up to €2.5bn through a share issue to strengthen its balance sheet. Peers Banco de Sabadell and Caixabank were also firmly in the red

United Utilities edged lower after posting a drop in full-year profit, while Daily Mail and General Trust shares slumped after the company reported a decline in first-half profit and warned that a weak print advertising market will squeeze margins in the media business.

On the upside, London-listed food ingredients maker Tate & Lyle rose after reporting a surge in full-year profit.

On the data front, there are no major Eurozone releases due, but in the US, durable goods orders are at 1330 BST, along with initial jobless claims. Pending home sales are at 1500 BST.