Europe open: Stocks waver after two days of gains; Brent crude breaches $50 level

European shares wavered in early trade following two days of gains, as Brent crude prices breached the $50 a barrel mark for the first time since November.

At 0900 BST, the benchmark Stoxx Europe 600 index was up 0.1%, Germany’s DAX was 0.5% higher and France’s CAC 40 was 0.3%.

“This appears to just be a case of profit taking from traders following what has been an unusually positive couple of days when compared with the rest of the month, which has been characterised by indecision and tight trading ranges,” said Craig Erlam, senior market analyst at Oanda.

“Given that we have two major risk events for the markets in the coming weeks –EU referendum in the UK and possible rate hike from the Fed - I do wonder though whether this rally has the legs to build significantly on the moves of the last couple of days.”

Meanwhile, oil prices advanced after data from the Energy Information Administration on Wednesday showed that US crude supplies declined by 4.2m barrels for the week ended 20 May, compared with expectations of a 2.5m drop.

West Texas Intermediate was up 0.7% to $49.90 a barrel while Brent crude was 0.8% firmer at $50.14.

“Whether the bullish trend still has legs or if an imminent correction is due remains a wild guess, as speculators over-exaggerate on the upside as they did recently on the downside. However, OPEC’s meeting on June 2 remains to be the key risk factor in the short term as markets are eager to know whether an agreement on a potential oil freeze will see the light,” said FXTM chief market strategist Hussein Sayed.

In corporate news, Banco Popular tumbled after the Spanish bank announced plans to raise up to €2.5bn through a share issue to strengthen its balance sheet. Peers Banco de Sabadell and Caixabank were also firmly in the red

United Utilities edged lower after posting a drop in full-year profit, while Daily Mail and General Trust shares slumped after the company reported a decline in first-half profit and warned that a weak print advertising market will squeeze margins in the media business.

On the upside, food ingredients maker Tate & Lyle rose after reporting a surge in full-year profit.

On the data front, there are no major Eurozone releases due, but in the US, durable goods orders are at 1330 BST, along with initial jobless claims. Pending home sales are at 1500 BST.