Europe midday: Stocks push higher on oil rebound, ZEW

European stocks rose on Tuesday, supported by a rebound in oil prices and a better-than-expected reading on German investor confidence.

At midday, the benchmark Stoxx Europe 600 index was up 1.2%, Germany’s DAX was 2% higher and France’s CAC 40 was 1% firmer.

At the same time, oil prices were in the black as a strike in Kuwait disrupted the supply chain. West Texas Intermediate was up 1.6% to $40.41 a barrel and Brent crude was 2% stronger at $43.75.

Oil was continuing to rebound from the heavy losses seen after the meeting of OPEC and non-OPEC producers in Doha on Sunday, which failed to yield an agreement to freeze production.

The Stoxx 600 oil and gas index edged up 0.7%, but basic resources were the standout gainers, with the sub-index for that sector up 1.9% as metals prices advanced.

“The bulls are back in charge,” said Joshua Mahony, market analyst at IG. “We are now in a position where sentiment is bullish by default and thus it seems like it will take something hugely significant to knock the indices off their stride. While this week does see the release of a handful of notable data points, none seem significant enough to alter the market mindset and as such, sentiment seems to be the most important factor driving markets, rather than economic data releases.”

The latest survey from the ZEW Center for European Economic Research in Mannheim also helped to underpin sentiment, as it showed German investor confidence improved more than expected in April.

The ZEW index of investor and analyst expectations rose to 11.2 from 4.3 in March, beating consensus estimates of 8.0.

The index for current expectations, however, fell to 47.7 in April from 50.7, missing expectations of 51.0.

The indicator of economic sentiment rose to 21.5 from 10.6, comfortably ahead of forecasts for a reading of 13.9.

Pantheon Macroeconomics said: “A surprisingly strong headline, despite the dip in the current situation index, which we can safely ignore as long as the expectations gauge continues to rise."

In corporate news, French cosmetics company L'Oreal rallied as its first-quarter revenue surpassed analysts’ expectations.

Roche Holding nudged higher after it reported a 5% jump in first-quarter sales on the back of growing demand for its three breast cancer medicines.

Rio Tinto was on the front foot after it reported a 13% increase in first quarter iron ore production, but trimmed its guidance for next year.

Primark owner Associated British Foods also gained, after its first-half earnings came in better than expected thanks to a long-awaited improvement in its sugar business.

On the downside, German online retailer Zalando was under pressure as its first-quarter sales fell shorts of analysts’ forecasts.

Still to come on the data front, US housing starts and building permits are at 1330 BST.