Europe midday: Stocks push higher as oil prices gain

European stocks rose on Monday, boosted by firmer oil prices as investors looked ahead to central bank meetings.

At midday, the Stoxx 600 index was up 1%, Germany’s DAX was up 0.8% and France’s CAC 40 was 1.4% higher.

Meanwhile, oil prices were on the front after Venezuela said OPEC and non-OPEC countries were nearing a deal to stabilise output.

According to press reports, Venezuelan President Nicolas Maduro said at a news conference: “We had a long bilateral meeting with [Iran’s president Hassan] Rouhani. We’re close to a deal between OPEC producer countries and non-OPEC.”

In addition, news that a military conflict in Libya over the weekend had affected its exports also helped to underpin prices.

West Texas Intermediate was up 1.5% to $43.66 a barrel while Brent crude was 1.2% higher at $46.32. This helped the Stoxx 600 oil and gas index to rise 1.5%.

Oanda’s Craig Erlam said: “Equity markets are getting a lift from gains across commodity markets today, helped in part by a drop in the dollar but also by reports of a deal to stabilise production and issues with Libyan exports.”

The Stoxx 600 basic resources index was 2.7% firmer.

The main focus for investors this week will be the Federal Reserve and Bank of Japan rate announcements on Wednesday.

Erlam said: “The market implied probability of a hike on Wednesday remains very low at 12% while December has risen to 55%. This does not mean the Fed will not raise interest rates on Wednesday of course, but it does suggest the chances are slim as the Fed will not want to unnecessarily rock the boat and has clearly not done a good job of preparing the markets for such an outcome. The weaker recent jobs report and retail sales data has also given the Fed reason for caution in the lead up to the meeting.”

Corporate news was thin on the ground.

Sky was a high riser as Morgan Stanley upgraded the stock to ‘overweight’ from ‘equalweight’, while Weir Group rose sharply after JPMorgan Cazenove lifted it to ‘overweight’ from ‘underweight’. Glencore also enjoyed a boost from an upgrade to ‘outperform’ from ‘neutral’ by Credit Suisse.

On the downside, Deutsche Bank shares were still in the red on last week’s news that the US Department of Justice has asked the German lender to pay £14bn to settle allegation s of mis-seling mortgage securities.

Outsourcer Mitie Group tumbled after it warned that full year profits would be materially lower than expected due to a drop-off in higher margin contracts in the first-half and the cost of new efficiency programmes.