European stocks surge as outlook for oil, Greece brightens

Europe’s stocks moved up on Tuesday as gains for Credit Suisse AG and Volkswagen AG shares and an important breakthrough on the Greek debt crisis allowed investors to set aside disappointing economic data.

The Stoxx Europe 600 climbed 0.9% to close at 336.24, a second consecutive advance following Monday’s 0.5% rise.

In the financial sector, Credit Suisse AG shares popped up 5% after the bank posted a smaller-than-expected loss of 302 million Swiss francs ($311 million). The lender has been struggling to restructure its investment banking business.

Meanwhile, Volkswagen AG shares bulked up 4%. The auto maker is close to a remedy to fix thousands of 3-liter diesel-powered vehicles in the U.S., according to a Bloomberg report. Volkswagen has been engulfed in an emissions-cheating scandal that kicked off in the U.S.

All sectors advanced, except for technology. Energy shares rose as oil prices pushed higher on reduced supply worries, with Brent crude surging nearly 4% to trade above $45 a barrel. Shares of Spanish oil producer Repsol SA rose 1.9% and Norwegian energy services provider Subsea 7 SA claimed a 2% rise.

“European markets looked fairly bubbly…[with] signs of Greek headway countering the latest lackluster figures out of the eurozone,” said Connor Campbell, financial analyst at Spreadex, in a note.

The Eurogroup of eurozone finance ministers on Monday welcomed overhauls on Greek pension reforms and tax hikes, but there was no formal approval of bailout payments.

Greece’s Athex Composite finished 3.2% higher at 629.29 on Tuesday, with shares of Eurobank Ergasias SA charging up 13.6%.

European stocks opened higher following mixed Chinese inflation data that indicated the country’s central bank may have more leeway to ease monetary policy.

Data: German industrial production dropped 1.3% in March, much more than the 0.2% expected in a Wall Street Journal survey of analysts. For the quarter, output rose 1.8% from the previous three months.

French industrial production fell by an unexpectedly sharp 0.3% in March.

Indexes: Germany’s DAX 30 rose 0.7% to 10,045.44, and France’s CAC 40 climbed 0.4% to 4,338.21, but finished off session highs.

Italy’s FTSE MIB was up 1.1% at 17,873.35 and Spain’s IBEX 35 tacked on 1.1%. The U.K’s FTSE 100 was up 0.6% at 6,150.07.

Movers: Pandora A/S shares jumped 11.2% after the Danish jeweler raised its estimates for full-year revenue while first-quarter net profit exceeded expectations.

EasyJet PLC shares rose 2.7%. The budget airline swung to a first-half net loss after the terrorist attacks in Paris and Brussels slowed bookings, but also said it’s raising its dividend payout.

Adecco SA shares fell 5% as the Swiss staffing company posted a bigger-than-expected drop in net profit.

Source: MarketWatch

 

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