Frankfurt: The European stocks rose by mid-morning on Wednesday as energy shares gained, boosted by higher crude and a new BG Group oil discovery.
At 02:38pm, the FTSEurofirst 300 index of top European shares was up 0.2% at 791.63 points which, if maintained, would result in its fourth consecutive day of gains.
The index has lost 5.1% so far this year, but is up 22.6% since reaching a record low on 9 March.
Oil stocks added most points to the index, with the DJ Stoxx Oil & Gas up 1.1%, after BG Group said a new well had proven the presence of another accumulation of light oil in the BM-S-9 concession, the third discovery in the block.
Shares in BG Group were up 3.1%, while BP and Petroplus were up 3.8 and 1%, respectively.
Crude oil rose 2% to $50.40 a barrel.
“The market seems to be cautiously optimistic, but I fear that this is a bit too early. Financials are still down and there is no clear trend,” said Postbank equity strategist Heinz-Gerd Sonnenschein.
Later in the day, US CPI for March and the New York Empire State Manufacturing Survey for April, both due at 06:00pm, will be in focus.
US industrial production and capacity utilisation data for March are due for release at 06:45pm, followed by the Federal Reserve’s Beige Book of regional economic conditions at 06:00pm.
“Another dramatic fall of capacity utilisation in the US industry will revive fears of deflation along with economic concerns,” Commerzbank said in a note.
Banks took most points off the index, after UBS’s chief executive warned of a first-quarter loss and said UBS would cut 8,700 more jobs.. Shares in the company were down 3.5%.
“After the first euphoria, investors are now slamming on the brakes. UBS is queuing up as just another bank with bad news,” Sonnenschein added.
Deutsche Bank fell 1.5%, Societe Generale fell 0.8% and BNP Paribas fell 1.7%.
US stocks fell on Tuesday as an unexpected drop in retail sales dented hopes that the recession was coming to an end. Financial shares lost ground on worries that Goldman Sachs’s share offering could prompt other banks to follow suit.
Across Europe, the FTSE 100 index was up 0.7%, Germany’s DAX and France’s CAC 40 were both 0.2% lower.
Shares in Rio Tinto dropped 2.5% after the world’s biggest producer of aluminium said output fell 6%, mostly due to curtailments in Europe.