FRANKFURT: European stock markets gained on Monday, but closed off their best levels after oil prices turned negative.
The Stoxx Europe 600 SXXP, +0.47% added 0.5% to finish at 333.22, rebounding somewhat from its 2.9% weekly drop last week.
“European stocks were mostly firmer on Monday, though a reversal in commodity prices erased much of the early gains,” said Jasper Lawler, a CMC Markets analyst, in a note.
Hopes that the U.S. Federal Reserve will keep rates on hold in June and a mostly positive session in Asia offset renewed concerns over a slowdown in China following weak trade data there. Disappointing U.S. labor market data out on Friday have dampened expectations the Fed will raise interest rates next month.
Oil optimism: A rally in oil prices initially helped boost the investing mood in Europe on Monday, but then crude turned south. West Texas Intermediate crude CLM6, -0.32% recently traded down 2.5%, and Brent LCON6, +0.11% was 3.4% lower. Oil investors were digesting Saudi Arabia’s unexpected removal over the weekend of long-serving oil minister Ali al-Naimi, along with expanding Canadian wildfires hitting that country’s oil-sands production.
Tullow Oil PLC’s stock TLW, -5.38% closed down 5.4% as early gains faded, while Repsol SA REP, -2.98% lost 3% and Eni SpA ENI, -1.25% shed 0.4%.
Mining stocks moved sharply lower after weaker-than-expected Chinese trade data fueled concerns the country’s economy. Exports fell 1.8% year-over-year in April, while imports slumped 10.9%.
“Conditions are likely to remain challenging though and more stimulus may be necessary to continue to drive improvements and help the economy achieve its ambitious growth targets,” said Craig Erlam, senior market analyst at Oanda, in a note.
Shares of Anglo American PLC AAL, -13.84% lost 14%, Glencore PLC GLEN, -8.96% GLCNF, -7.14% 0805, -3.74% dropped 9% and Rio Tinto PLC RIO, -7.92% RIO, -7.86% RIO, -4.28% fell 7.9%.
Greek bailout talks: Greece returned to the forefront of investor attention on Monday. The country’s parliament on Sunday voted to overhaul pensions and increase taxes in a move hoped to bring it closer to unlock bailout funds.
The Eurogroup of eurozone finance ministers was meeting in Brussels on Monday to talk about Greece’s bailout program and possibly kick off a discussion about relief for the debt-laden country.
“Greece is definitely heading in the right direction and finally some material progress has been achieved. We note that it is imperative for Greece to receive the loan disbursements by July, when it has to make a €2.2 billion payment to the European Central Bank,” said Eirini Tsekeridou, fixed income analyst at Julius Baer, in a note.
The Athex Composite Index GD, +0.74% rose 0.7% to 610.07.
Other indexes: Germany’s DAX 30 index DAX, +1.12% jumped 1.1% to finish at 9,980.49, while France’s CAC 40 index PX1, +0.50% gained 0.5% to 4,322.81.
But the U.K.’s FTSE 100 index UKX, -0.18% fell 0.2% to end at 6,114.81, as the drops by miners weighed.
