Europe open: Stocks rise as oil prices gain ground

European stocks edged up in early trade as investors sifted through more earnings amid rising oil prices, with volumes likely lower than usual as France and Germany enjoyed a bank holiday for Ascension Day, although stock markets there were open.

At 0900 BST, the benchmark Stoxx Europe 600 index was up 0.2%, Germany’s DAX was up 0.2% and France’s CAC 40 was 0.1% higher.

At the same time, oil prices advanced as a wildfire near Canada’s oil-sands district threatened production. Fighting in Libya also helped to lift prices. West Texas Intermediate was up 3% to $45.07 a barrel and Brent crude was 2.4% firmer at $45.70.

“With stocks having declined for four straight sessions and 'technicals' having turned oversold in the short-term, lower prices are starting to attract bargain hunters,” said Markus Huber, a trader at City of London Markets.

“However overall sentiment remains negative as uncertainty concerning global growth, a potential US rate hike in the third quarter and disappointing corporate earnings continue to take a toll on markets. Because of a lack of positive news and overall prevailing bearish sentiment, it appears likely that markets might run out of steam as the day progresses with sellers re-entering the market later today.”

Investors digested data out earlier showing China's Caixin services purchasing managers' index printed at 51.8 in April, down from March’s 52.2 but still above the 50 mark that separates contraction from expansion.

In corporate news, Spanish oil major Repsol rallied as its first-quarter adjusted net income beat analysts’ expectations.

BT Group was in the black after reporting a 9% rise in full-year adjusted pre-tax profit and unveiling a £6bn network upgrade programme for its newly-acquired EE business and Openreach infrastructure arm.

RSA Insurance was also higher after reporting a strong first quarter, with operating profit ahead of expectations.

Barclays nudged up after selling down its stake in its African subsidiary to 50.1% after a splacing in South Africa.

On the downside, energy supplier Centrica was under the cosh after announcing a share placing to fund acquisitions and reduce debt. It was also weighed by a downgrade from Exane BNP Paribas.

Aerospace and defence group Rolls-Royce slid after saying it was on track to deliver expected cost savings, but that these would be significantly weighted towards the second half.

There are no major Eurozone data due, but investors will eye the release of US initial jobless claims at 1330 BST, particularly after Wednesday's ADP employment report missed expectations.