- Stoxx 600 closes 0.4% higher, trimming earlier rally of 1.9%
- Germany's DAX reverses gains, falling 7th time in 9 sessions
European stocks clung to their first back-to-back gains in almost a month, after giving up much of an earlier rally in the final two hours.
Energy companies posted the best performance on the Stoxx Europe 600 Index, even after trimming some gains on a report showing an increase in crude inventories. Commodity producers rebounded from a 12-year low, with Rio Tinto Group and Randgold Resources Ltd. rising at least 1.5 percent.
The Stoxx 600 added 0.4 percent at the close of trading. It rallied as much as 1.9 percent earlier amid better-than-forecast Chinese trade data, before briefly erasing gains as oil headed lower.
“The market was pricing a hard-landing in China, and with the latest trade data and the central bank’s effort to prop up the currency, those fears seem to have been overblown,” said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. “Now we’re probably going to see the market go the other way. Stocks that have taken the biggest hit are those related to energy. It makes sense that they rebound the most.”
European stocks are climbing after concern that turmoil in China’s markets would hamper global growth drove them to the worst-ever start to a year. The Euro Stoxx 50 Index tumbled 7.2 percent last week.
In the past seven years, every time the euro-area gauge has fallen more than 7 percent in a week, it has rallied 16 percent on average in the subsequent three months. Investors are less sure of a repeat performance this time, as they worry about global growth amid higher U.S. interest rates. Antonin Jullier, Citigroup Inc.’s global head of equity trading strategy, recommends buying the region’s equities after recent lows and riding the rebound before cashing in.
A gauge of energy producers snapped a nine-day losing streak, rising from its lowest level since 2009. Tullow Oil Plc advanced 4.7 percent after saying it plans to reduce capital expenses this year.
Banco Popolare SC and Banca Popolare di Milano Scarl rallied 4.2 percent or more as people familiar with the matter said the two are in advanced merger talks.
Germany’s DAX Index reversed early gains of as much as 1.8 percent to fall 0.3 percent. BMW AG and Continental AG lost at least 2.1 percent. EON SE climbed 4.1 percent after Reuters reported Premier Oil Plc is buying the utility’s oil-and-gas assets in the U.K. part of the North Sea.