By Carla Mozee and Victor Reklaitis, MarketWatch

Energy shares rally as oil tries for $50

European stocks closed with strong gains Wednesday, as international creditors reached a deal to unlock more bailout funds for Greece and oil prices gained.

The Stoxx Europe 600 was up 1.3% to finish at 348.56, scoring its highest close since April 28, according to FactSet data. The pan-European index nabbed a second consecutive gain, after Tuesday's session closed up by 2.2% (http://www.marketwatch.com/story/european-stocks-turn-higher-led-by-gains-for-banks-2016-05-24).

Greek deal: Greece is now in line to receive 10.3 billion euros ($11.48 billion) in new loans (http://www.marketwatch.com/story/breakthrough-greek-debt-deal-reached-with-eurozone-imf-2016-05-24), if a deal struck early Wednesday is signed off by the 19 countries comprising the eurozone.

The new payout comes after eurozone finance ministers and the International Monetary Fund agreed that Greece has made the necessary progress on reforms. The funding will help Athens from defaulting on large debt redemptions to the IMF and European Central Bank in July. The ministers also agreed on a potential road map on debt relief for Greece.

"Greece's creditors reached a deal to avoid a summer car crash in a way that only they know how, involving extension of maturities, adjustment of interest rate payments with a good dose of things still to be decided, some of them after the German federal elections next year," said Simon Smith, chief economist at FxPro, in a note.

"Still, for the single currency, this has removed one of the potential risks for the summer, with the deal unusually being reached comfortably ahead of the loan disbursement next month," he said.

The euro was up 0.2% to $1.1160.

Oil: Energy shares were supported as oil prices crept toward $50 a barrel (http://www.marketwatch.com/story/crude-oil-rockets-to-near-50-a-barrel-as-data-hints-at-us-supply-drop-2016-05-25), with the move coming after data pointed to decreases in U.S. crude inventories. West Texas Intermediate crude briefly traded as high as $49.62 a barrel on Wednesday, according to FactSet data, but recently was up 0.6% to $48.90 a barrel.

Among energy producers, Spain's Repsol SA (REPYY) rose 3.7%, and Italy's Eni SpA (ENI.MI) gained 3.5%.

Indexes: Germany's DAX 30 finished 1.5% at 10,205.21, while France's CAC 40 moved up 1.1% to 4,481.64. The U.K's FTSE 100 rose 0.7% to end at 6,262.85

Movers: Marks & Spencer Group PLC (MKS.LN) shares dropped 10% as the apparel and food retailer said profit fell 19% and warned on margins (http://www.marketwatch.com/story/marks-spencer-profit-down-19-warns-on-margins-2016-05-25).

Regus PLC (RGU.LN) shares bulked up 4% after RBC raised its rating on the outsourcing services company to outperform from sector perform.

Economic news: From Germany, the Ifo business-climate index rose to 107.7 in May (http://www.marketwatch.com/story/german-ifo-business-climate-index-rises-in-may-2016-05-25), better than the 106.8 reading expected by economists survey by The Wall Street Journal.

 

(END) Dow Jones Newswires

May 25, 2016 12:07 ET (16:07 GMT)

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