Europe midday: Stocks on the rise with OPEC meeting underway

European stocks remained in the black by midday as investors bet that OPEC members would come to an agreement on production at the cartel's meeting in Vienna.

The benchmark Stoxx 600 was up 0.23%, France’s CAC 40 rose 0.46% and Germany’s DAX was 0.22% higher.

Oil prices surged amid growing expectations that the members of the Organization of the Petroleum Exporting Countries will be able to agree on a production cut at their meeting in Vienna - which got underway at 0900 GMT - after the Saudi oil minister Khalid al-Falih said members were “getting close to a deal”.

Earlier, Iran’s oil minister, Bijan Zanganeh, said he reckoned a deal could be reached, although an immediate freeze by Iran wasn’t on the agenda.

West Texas Intermediate and Brent crude rose 6.7% and 6.9% to $48.47 and $49.84 per barrel respectively. The Stoxx oil and gas index rose 2.05%.

IG Market Analyst Joshua Mahony said: “Today was always going to be all about OPEC and early signals are that we will not be disappointed, with crude prices gaining almost 6% off the back of speculation that a deal will finally come to pass. Despite differing views emerging from Vienna, one recurring theme is that OPEC members are very close to agreeing a deal to curb output, with concessions for the likes of Iran raising the possibility of a deal that manages to please most members.”

On the data front, inflation in the eurozone rose to its highest level since early 2014 in November, in line with expectations, according to a flash estimate released by Eurostat.

Consumer prices in the euro area were up 0.6% from a year ago, compared to 0.5% in October while Core inflation, which excludes unprocessed food and energy prices, was 0.8% year-on-year compared to 0.7% in October.

Pantheon Economics Chief Eurozone economist Claus Vistesen said: “These data won’t change the ECB’s position much. We continue to think that the central bank will extend QE by six months to Q3 2017 when it convenes for its December meeting next week. EZ inflation likely will rise sharply in Q1 as base effects from the crash in oil prices push the energy component higher, but the ECB has already stated that it intends to look through that. Core inflation, meanwhile, will remain well below the target of 2%, supporting a decision to prolong stimulus.”

Meanwhile, Germany’s unemployment rate came in at 6%, unchanged from the previous month and in line with economists’ expectations.

The number of unemployed people fell by a seasonally-adjusted 5,000, also as expected, following a 13% drop the month before.

Vistesen said: “We are literally in uncharted territory at the moment, with unemployment pushing new lows on a monthly basis, and vacancies rising to new highs. Our base case is that wage pressures will pick up next year. Employment — data released for October — also continued to hit new highs, but growth is slowing compared with the first half of the year.”

In London, banks were in focus following the results of the Bank of England’s latest stress tests. State-owned Royal Bank of Scotland performed the worst and has been forced to submit plans to raise fresh capital, while rivals Barclays and Standard Chartered failed requirements but will not require extra funds.

RBS failed to pass all the hurdles of the stress test and has agreed a revised capital plan with the Bank of England's Prudential Regulation Authority to raise at least £2bn of extra capital.

Elsewhere, Sage fell back after earlier gains. The accounting software company reported annual revenues and earnings that were slightly ahead of expectations.

Linde AG shares surged after the company confirmed it has received a revised proposal concerning a potential merger of equals with Praxair.