Europe open: Stocks in the black as energy and basic resources rally

European stocks rose in early trade as oil prices continued to push higher and investors sifted through some earnings ahead of a key German data release.

At 0850 BST, the benchmark Stoxx Europe 600 index and Germany’s DAX were both up 0.8%, while 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 2.1% higher at $43.79.

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 rallied 1.7%, but basic resources were the standout gainers, with the sub-index for that sector up 2.6% as metals prices advanced.

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

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

Rio Tinto gained after posting a 13% increase in first-quarter iron ore production, but trimming its guidance for next year.

Primark owner Associated British Foods was on the front foot 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, the German ZEW survey is at 1000 BST.

“A better than expected number will help to give equity indices a lift and help to support the Euro around some key levels against the greenback. It becomes especially important as we approach Thursday ECB meeting, with Mario Draghi desperate to see an improvement in macro-economic readings” said James Hughes, chief market analyst at GKFX.

In the US, housing starts and building permits are at 1330 BST.

“Later in the session we will be looking towards to US housing starts and building permits for the pre US kick to markets. This afternoon will also see comments from BoE governor Mark Carney, so GBPUSD will be on alert for any more comments over the EU referendum and the repercussions of any decision.”