European stocks snap four-day losing run as oil prices rally

European stock markets rose for the first time in five sessions on Thursday, with optimism over a rally in oil prices outweighing concerns over a slowdown in growth in China’s services sector.

The Stoxx Europe 600 index SXXP, -1.12% rose 0.2% to 332.30, climbing back from the lowest closing level since April 7 reached on Wednesday.

Trading volumes were expected to be lower during the session due to bank holidays in Germany and France because of Ascension Day, “which can quite often result in higher levels of volatility”, said Craig Erlam, senior market analyst at Oanda in a note.

French and German stocks markets were, however, open for trade as usual. Exchanges were closed in Austria, Switzerland, Denmark, Finland, Iceland, Norway and Sweden.

Oil boost: The overall markets took a cue from a positive day for oil prices, with West Texas Intermediate CLM6, +3.11% up almost 3% at $45.05 a barrel and Brent LCON6, +2.42% rising 2.3% to $45.63.

“After being hit yesterday afternoon by slightly higher than expected EIA oil inventories, the oil price has rallied once more on the news that the Canadian wildfires are disrupting output from Canadian oil sands production,” said Richard Perry, analyst at Hantec Markets, in a note.

Shares of Tullow Oil PLC TLW, +6.73% jumped 7.5% and SBM Offshore NV SBMO, +1.59% added 1.6% and BP PLC BP., -0.65% BP, -1.69% picked up 1.1%.

Repsol SA REP, +5.42% gained 4.1%. Spain’s largest energy company on Thursday reported a 40% plunge in first-quarter net profit, hit by falling energy prices.

The optimism spreading from the oil market also helped offset data from China showing service activity in the world’s second largest economy grew at a slower pace in April. Asia markets closed mixed.

Movers & shakers: Shares of BT Group PLC BT.A, +3.29% rose 3.3% after the U.K. telecom company’s fourth-quarter earnings improved, boosted by broadband services and sports channels.

IMI PLC IMI, +3.19% gained 3.9% after the specialist engineering company reiterated its full year outlook amid continuing challenging economic conditions.

On a more downbeat note, Centrica PLC CNA, -8.35% slumped 7.4% after the energy supplies said it plans to raise around £750 million ($1.09 billion) from a private placement of shares to fund two acquisitions and pare debt in light of mounting pressure on its credit rating.

Indexes: Germany’s DAX 30 index DAX, +0.89% gained 0.2% to 9,844.31, while France’s CAC 40 index PX1, +0.47% picked up 0.1% to 4,327.82.

The U.K.’s FTSE 100 index UKX, +0.62% rose 0.4% to 6,135.77.

Source: Reuters

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