European Stocks Advance as Crude Reverses Loss, Miners Climb

Muted Trading Session in Europe
  • Volkswagen jumps after saying no need for U.S. trial
  • ABB climbs after quarterly profit beats analyst estimates

European stocks advanced in late trading, extending a three-month high, as a rebound in oil spurred energy stocks, and miners climbed.

Total SA led energy companies higher as crude recovered following data that showed a drop in U.S. output. BHP Billiton Ltd. paced gains in resource-related shares as metals rose after it cut its iron ore production forecast. ABB Ltd added 3.8 percent after the world’s largest maker of power grids posted profit that beat estimates. Volkswagen AG jumped 6.6 percent after saying it expects no need for a U.S. trial in mid-2016 over damages related to rigging diesel-engine control software to dupe emission tests. 

“Oil prices remain a phenomenon,” said Guillermo Hernandez Sampere, head of trading at MPPM EK in Eppstein, Germany. “The volatility in oil will not come to an end, as supply and demand are not in focus. We must accept that it’s a game of power and not fundamentally based anymore.”

The Stoxx 600 rose 0.4 percent to 350.74 at the close of trading, after earlier falling as much as 0.5 percent. Recent gains have pushed it out of a holding range it was stuck in for a month. Still, the equity gauge has tumbled 15 percent since reaching a record a year ago, and optimism over European Central Bank stimulus has given way to skepticism about its ability to boost growth. 

Investors await Thursday’s ECB meeting for clues about the path of monetary policy. While economists are virtually certain Mario Draghi won’t touch interest rates, recent history shows that increased stock volatility is still likely. Intraday swings for the Euro Stoxx 50 Index averaged 4.1 percent during the ECB President’s past four policy updates, or about double that for all meetings since 2010.

Among stocks moving on corporate news today, Commerzbank AG fell 2.2 percent after Chief Executive Officer Martin Blessing said a slow first quarter will make it more difficult to match last year’s profit. 

ASML Holding NV fell 4.1 percent, dragging a measure of technology stocks to the worst performance on the Stoxx 600 after the semiconductor-equipment maker forecast pressure on earnings as the introduction of new technology boosts costs. GAM Holding AG slid 5.8 percent after reporting net outflows in investment management of 3.1 billion francs ($3.2 billion) for the first quarter.

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