October 10, 2016 / 4:11 PM / 2 years ago

European stocks rise helped by oil stocks; Deutsche Bank rebounds

(ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets) Adds details, closing prices)

* STOXX 600 rises 0.7 pct

* Oil stocks biggest sectoral gainer

* Deutsche Bank rises at end of volatile day

* William Hill rises on Amaya merger talks

By Sudip Kar-Gupta and Danilo Masoni

LONDON/MILAN, Oct 10 (Reuters) - European shares rose on Monday, reversing earlier weakness as oil stocks rallied on the back of stronger crude prices.

The pan-European STOXX 600 index rose 0.7 percent, rising for the first time in four sessions days.

The STOXX Oil index rose 1.9 percent, making it the biggest gainer, as Brent crude prices rose to their highest in a year after Russia said it was ready to join a proposed deal to cap oil production in a bid to stem a price slide.

Shares in oil majors Royal Dutch Shell, Total and Eni all rose by more than 2 percent.

Deutsche Bank rose 3.4 percent, reversing earlier losses after Austria’s finance minister Hans Schelling said he believed the German lender’s problems could be resolved without collateral damage.

However some investors were cautious on the stock, which fell as much as 3.7 percent earlier in the session due to disappointment at a lack of progress in the company’s battle against a demand by U.S. authorities for up to $14 billion over misselling allegations.

“I would still steer clear of Deutsche Bank. They were never going to sort out the U.S. issues that quickly, and whatever happens, I still think they will need to have a rights issue,” said Terry Torrison, managing director at Monaco-based McLaren Securities. The stock is down around 50 percent so far in 2016.

Shares in William Hill climbed 2.8 percent after the British gambling company said it was in merger talks with Canadian online peer Amaya.

EasyJet, which issued a profit warning last week, fell 2.3 percent after SocGen cut its rating on the stock to “sell” from “hold”.

Some traders said equities remained their favoured asset class, since record low interest rates in the euro zone and Britain had hit returns on bonds and cash, driving investors to the better returns on offer from the stock market.

“My view remains to buy the dip with interest rates remaining at these low levels,” said Lex Van Dam, hedge fund manager at Hampstead Capital LLP. (Editing by Mark Heinrich)

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