×

Europe ends sharply up as oil soars; Credit Agricole, miners jump

European markets finished sharply higher on Wednesday as investors cheered the recovery in oil prices and mining stocks, ahead of the release of the minutes of the last Federal Reserve meeting.

The pan-European STOXX 600 closed up 2.6 percent provisionally, with all sectors finishing in positive territory.

London's FTSE 100 jumped 2.9 percent, with the index closing above 6,000 points. Germany's DAX finished 2.65 percent up, while France's CAC soared 3 percent, as a surge in Credit Agricole shares gave the index a boost.

'We're in a trampoline market right now, where stocks are bouncing around wildly almost every day," Laith Khalaf, a senior analyst at Hargreaves Lansdown, said in an afternoon note.


Oil rises

Symbol
Name
Price
 
Change
%Change
Volume
FTSE
---
DAX
---
CAC
---
IBEX 35
---

Oil continued to dominate market sentiment, with prices rising sharply, on the prospect of further developments in fixing oil's current supply glut. On Wednesday, Iran's oil minister Bijan Zanganeh was quoted saying that the country supported the decision by OPEC and non-OPEC oil producers to keep a "ceiling" on oil production.

"The decision that was taken for the OPEC and non-OPEC members to keep their production ceiling to stabilise the market and prices for the benefit of producers and consumers, is supported by us," Zanganeh told the ministry's official Shana news agency.

Brent crude jumped 7 percent on the back of this, last standing at $34.46, while U.S. crude was up over $1.50 at $30.88. Oil and gas stocks also rallied, with Seadrill and Tullow Oil closing up over 7.5 and 10 percent respectively. Total reversed earlier losses to close up 1.5 percent, despite Groupe Bruxelles Lambert announcing it had sold a 0.7 percent stake in the company.

Fed watch

At the close, investors were also looking ahead to the minutes released from the Fed's January meeting, due out later that day. Markets will be hoping they give more clues as to the Fed's internal talks around the path of interest rate hikes after it left rates on hold last month. Investors need to keep in mind what Fed officials have said in recent weeks when reading the minutes, according to analysts.

On the data front, the U.K.'s unemployment rate remained unchanged in the final quarter of 2015 at 5.1 percent, while wage growth slowed, highlighting that the Bank of England is likely to keep interest rates on hold for now.

In global markets, U.S. equities traded sharply higher on the back of oil and promising economic data, while Asia closed mostly lower, with the exception of China's Shanghai composite and Shenzhen composite, which both closed above 1 percent.

Miners soar

The basic resources sector was Europe's best performing sector, closing up 8 percent. Aluminium and renewable energy company Norsk Hydro cut its 2015 forecast for global demand for the metal but posted underlying operating profit that beat forecasts, sending shares up to close over 12 percent.

Glencore announced that it would carry out an early refinancing of a $8.45 billion loan facility, sending shares near the top of benchmarks, closing up around 16.5 percent.

And Anglo American soared 17.6 percent after Credit Suisse and Deutsche Bank both raised their price target for the stock.

Credit Agricole surges

On the earnings front, Credit Agricole announced plans to simplify its ownership structure with the listed entity selling back its stake in its parent banks back to them. Credit Agricole said that this would give it a stronger capital base, sending shares closing up near 14 percent.

Meanwhile European exchange group Euronext slumped 6.5 percent, after it reported a 26 percent rise in full-year core earnings helped by strong listing activity and cash trading.

Shares in RWE tumbled over 12 percent, making it Europe's worst performer, after the utilities firm scrapped its dividend payment for 2015, and reported a net loss.