Europe close: Stocks end on mixed note despite OPEC

European stocks were mostly higher on Thursday, with energy shares pacing the advance after OPEC ministers agreed a deal to cut production for the first time since 2008.

The benchmark Stoxx Europe 600 index was edging higher by 0.04%, Germany’s DAX was 0.31% lower and France’s CAC 40 was up 0.26%.

At the OPEC meeting in Algiers, ministers agreed to cut production to between 32.5m and 33m barrels a day, down from August's output levels of about 33.5m barrels, with further details of the agreement due to be discussed at the next meeting on 30 November.

Oil prices initially surged on the news, but by Thursday morning they were retreating, with investors booking profits as scepticism crept in about the deal.

By the closing bell in London, West Texas Intermediate was up by 2.35% at $48.18 a barrel and Brent crude by another 1.95% to $49.66.

Against that backdrop, energy stocks powered ahead, with the Stoxx 600 oil and gas index up 4.31%.

IG’s Chris Beauchamp said: “OPEC’s surprise decision to cut output has given oil markets a remarkable fillip, with the hope that more will come at the November meeting undoubtedly playing a part.

“Expectations of a bigger cut to output later on in the year, ideally with Saudi Arabia and Russia, the two biggest players, doing their bit, could see oil reverse its traditionally weak performance in the fourth quarter and push higher. It turns out that OPEC members can agree, and no doubt oil companies and their investors will be hoping that this outbreak of amity continues into the end of 2016.”

In corporate news, Bankia gained ground on news the Spanish government is considering merging the bank with Banco Mare Nostrum.

Credit Suisse was also in the black amid reports the bank could settle a US investigation into its mortgage-bond dealings within weeks.

On the downside, Commerzbank was under pressure after saying it will reduce its workforce by 20% in the next few years by axing 9,600 jobs as it looks to cut costs and boost profitability.

Outsourcer Capita tumbled after it warned that full-year profits will be some way short of current forecasts after its third quarter was hit by a slowdown in some areas, one-off costs and recent hesitation among clients.

On the data front, figures from Destatis showed German unemployment unexpectedly rose in September, but the unemployment rate remained at a record low.

The unemployment rate came in at 6.1%, unchanged from the previous month and in line with economists’ expectations.

Meanwhile, the number of unemployed people increased by a seasonally-adjusted 1,000 to 2.68m, versus expectations of a 5,000 drop.

Elsewhere, a report showed eurozone economic sentiment rose more than expected in September. The European Commission’s economic sentiment index edged up to 104.9 in September from 103.5 in August, beating expectations for an unchanged reading.