LONDON: European stocks rose and euro zone bond yields edged up on Tuesday as oil prices stabilised above 11-year lows on the back of prospects for lower temperatures on both sides of the Atlantic.
The fall in oil prices has been a major driver of financial markets this year, hammering energy companies, lowering inflation expectations and reinforcing bets on loose monetary policy in Europe and a slow tightening in the United States.
U.S. West Texas Intermediate (WTI) futures were up 21 cents at $37.02 per barrel, following a more than 3 percent fall on Monday. Brent, the international benchmark, was at $36.82 per barrel, up 20 cents but still less than a dollar away from an 11-year low hit earlier in December.
This lifted shares in Europe, where the pan-European FTSEurofirst 300 index rose 0.9 percent while the euro zone's blue-chip Euro STOXX 50 index advanced 1.3 percent.
"Brent crude is slightly higher, and if it can drag itself across the $37 per barrel mark it is struggling with, then European stock markets may be able to hold on to some gains," said Spreadex analyst Connor Campbell.
Britain's blue-chip FTSE 100 index, opening for the first time since the Christmas break, rose 0.4 percent. It underperformed its European peers due to a fall in major mining stocks, which account for around 5 percent of the FTSE's market capitalisation.
Their poor performance came as London copper dipped for a second day and aluminium shed 1 percent on concerns about demand from top consumer China.
Deutsche Bank rose 1.6 percent following its move to sell its 20 percent stake in China's Hua Xia Bank to insurer PICC Property and Casualty Co for up to 25.7 billion yuan ($4 billion).
German 10-year Bund yields, the benchmark for euro zone borrowing costs, rose 2 basis points to 0.58 percent and most other bond yields in the single currency region were up 1-3 basis points.
Spanish bond yields nudged down as differences between political parties made an anti-austerity leftist coalition look increasingly unlikely.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1 percent. But it remained on track to mark a loss of around 12 percent for 2015, a year that saw it log a more than seven-year high in April.
China's blue-chip CSI300 index added 0.9 percent, while the Shanghai Composite Index closed up a similar amount, as the central bank vowed to maintain reasonable credit growth and keep the yuan stable.
China's yuan fell to 6.5800 against the dollar in offshore trading, its weakest since a hefty devaluation in August, mirroring a fall in onshore rates, with traders citing strong year-end dollar demand.
The euro nudged up 0.1 percent to $1.0980.
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