Europe close: Stocks edge higher ahead of Draghi
European stocks edged higher amid rising oil prices, as investors looked to Thursday’s European Central Bank meeting for fresh catalysts.
The benchmark DJ Stoxx Europe 600 index was higher by 0.49% to 339.14, Germany’s DAX by 0.31% and France’s CAC 40 was up 0.49%.
Oil prices advanced after data from the US Energy Information Administration revealed the country's monthly oil production, at 9.3m barrels per day, hit its lowest level since November 2014 in December of last year.
West Texas Intermediate crude oil futures were up by 3.85% to $37.96 a barrel and those for Brent crude 3.2% firmer at $40.05.
“Equity markets have stemmed their declines and regained poise. This sees continuation of what the bulls hope turns out to be consolidation before another leg higher. The driver could be a run of supportive central bank updates (ECB, BoE, BoJ, Fed), beginning with the ECB tomorrow. Draghi wouldn't dare disappoint again would he?” said Mike van Dulken, head of research at Accendo Markets.
“The fact that European futures held up so well overnight is, in our view, reassuring in itself, suggesting optimism that a mix of bold action and soothing rhetoric will give bullish sentiment the fillip it needs after understandably waning lately.”
Market participants were pricing in a 10 basis points cut to the deposit rate, an extension of asset purchases and maybe even the introduction of tiered interest rates.
In corporate news, Prudential was a high riser after the insurer reported a 22% rise in 2015 operating profit and lifted its dividend.
German power company E.ON dropped 3% after telling shareholders its 2015 loss doubled on impairment charges, the group’s earnings before interest, tax, depreciation and amortisation did however beat analysts’ expectations.
Credit Agricole was on the front foot after announcing plans to boost synergies and cost savings by 2019.
Shares in Zara and Bershka owner Inditex were in fashion as it posted a 5% jump in fourth quarter net profit.
On the downside, Deutsche Post nudged lower despite reporting record fourth quarter operating profit.
Beleaguered German car maker Volkswagen skidded on news the US Justice Department has sent the company a subpoena under a bank fraud law in its diesel emissions probe.
Meanwhile, luxury brand Burberry tumbled, giving back the gains it made in Tuesday’s session as HSBC downgraded the stock to ‘hold’ from ‘buy’.
FTSE 250 security firm G4S tanked after it posted a drop in 2015 pre-tax profit and revenue, mainly on the back of onerous contracts and restructuring costs.