Europe open: Stocks bounce bank as Commerzbank, Rolls-Royce surge

European stocks rose on Friday, bouncing back from heavy losses in the previous session as investors cheered results from the likes of Commerzbank and Rolls-Royce.

At 0900 GMT, the benchmark Stoxx Europe 600 index was up 1.8%, Germany’s DAX was 1% higher and France’s CAC 40 was up 1.1%.

“European markets are ready to recover some of the losses after being battered badly throughout this week,” said Naeem Aslam, chief market analyst at AvaTrade.

“Traders are thinking enough is enough and let's bag some bargains and this is despite the fact that we had a heavy selloff over in Asia.”

However, Aslam cautioned that it was too early to tell whether the downward spiral for the global equity market was coming to an. “The bounce which we may experience may not last for long, as investors are apprehensive about the banking sector due to the low interest rate environment and feeble growth.”

Meanwhile, oil prices were firmer, boosted by comments from Saudi Arabia’s energy minister, which fuelled hopes of a coordinated production cut by OPEC members.

West Texas Intermediate was up 3% at $26.99 a barrel while Brent crude was 2.9% higher at $30.94, helping to push the Stoxx 600 oil and gas index up 2.9%.

On the corporate front, shares in German lender Commerzbank surged on Friday as it swung back to a profit in the fourth quarter and announced a dividend. The Stoxx 600 banks index added 2.6%.

Aerospace and defence group Rolls-Royce rocketed in London despite halving its dividend, as it maintained its 2016 outlook and posted slightly better than expected underlying full year profits.

Renault advanced 2.4% after reporting a 44% jump in annual profit that beat analysts’ expectations.

Data released earlier by Destatis showed gross domestic product in Germany grew 0.3% in the fourth quarter, in line with the previous quarter and economists’ expectations.

The overall rate of growth for 2015 was 1.7%, while unadjusted figures showed the economy grew 2.1% on the year, missing economists’ expectations for 2.3%.

“A surprisingly strong report, with government spending and construction likely the key drivers of the increase in GDP, offsetting weakness in manufacturing, net exports and consumers’ spending,” said Pantheon Macroeconomics.

Still to come on the macroeconomic front, the flash release of fourth quarter Eurozone GDP and industrial production are at 1000 GMT. In the US, the import price index and retail sales are at 1330 GMT.

University of Michigan consumer confidence is at 1500 GMT, along with business inventories.