Europe midday: Stocks in the black as oil rallies; RBS tumbles

European stocks advanced on Friday as oil prices rallied and investors sifted through another round of earnings.

At midday, the benchmark Stoxx Europe 600 index was up 1.4%, Germany’s DAX was up 2% and France’s CAC was 1.8% firmer.

“Investors are cautiously optimistic as we see out the week, but there will no doubt be many more twists and turns on the road ahead. With the G20 summit ahead and high expectations of bullish comments from the forum, investors are taking their cue to move with the hot air and push stocks higher,” said Mike McCudden, head of derivatives at Interactive Investor.

Meanwhile, oil prices pushed higher amid hopes of production cuts. On Thursday, it emerged that Venezuela, Russia, Saudi Arabia and Qatar will meet again next month in a bid to stabilise prices.

West Texas Intermediate was up 2.1% to $33.75 a barrel and Brent crude was 2.2% firmer at $36.06.

Sentiment was also underpinned by expectations that the G20 meeting of finance ministers in China will deliver a coordinated stimulus programme to bolster the slowing global economy.

In corporate news, education publisher Pearson surged as it swung to a loss in 2015, but said it sees a turnaround in sight by 2018.

Spanish travel IT company Amadeus rallied after it posted a rise in full year profit and said it was targeting a dividend payout of 50% of reported profits this year.

BHP Billiton was firmer after it denied reaching a settlement with Brazilian authorities over the Samarco mine disaster but said significant progress has been made in negotiations.

German chemicals company BASF was in the black despite posting a 76% drop in fourth quarter net profit.

Burberry was on the front foot after Nomura upgraded the stock to ‘buy’ from ‘neutral’.

On the downside, shares in Royal Bank of Scotland tumbled after it posted a full year loss and delayed the prospects of any dividend payouts. Although the loss was narrower than the previous year, it was the bank’s eighth year of losses.

British Airways and Iberia parent International Consolidated Airlines Group was a little weaker despite reporting a big jump in 2015 profit.

Salzgitter slipped as the steelmaker said its loss after tax widened in 2015.

Investors also digested the latest data from the European Commission, which showed economic sentiment in the Eurozone deteriorated more than expected in February.

The EC’s headline economic sentiment indicator fell to 103.8 from a revised 105.1 in January.

This was below economists’ expectations for a reading of 104.4 and marked the lowest reading since June 2015. It was also the second consecutive month of decline.

The EC said the fall came on the back of deteriorating confidence among consumers in all business sectors apart from construction, while in terms of countries, the Netherlands saw a sharp drop.

Meanwhile, the EC’s business climate indicator fell by 0.2 points to 0.07, missing consensus expectations for a reading of 0.28.

Pantheon Macroeconomics said the indicators were poor.

“Another downside surprise from economic survey data. The headline sentiment index fell to an eight-month low, driven by weakness in both services and industrial confidence.”