Rise in oil price above $50 helps to drive up mar­kets

Irish Independent - Business Week - - BUSINESSWEEK -

OIL’S rise back above $50 a bar­rel helped prod stock mar­kets higher yes­ter­day, while com­pany re­sults and eco­nomic data con­tin­ued to soothe wor­ries that the world econ­omy may be ripe for a an­other slow­down.

Euro­pean stock mar­kets rose around half a per­cent by lunchtime, led by en­ergy and com­mod­ity-linked firms af­ter Brent crude topped the $ 50 mark for the first time since early June and cop­per added an­other 1pc to this week’s surge.

A slightly less bullish per­for­mance in Asia pulled the MSCI world equity in­dex which tracks shares in 46 coun­tries, off all-time highs overnight.

But early in the Euro­pean ses­sion, it was up 0.1pc on the day, and US stocks fu­tures showed Wall Street should edge higher on open­ing, which it did.

Strong re­sults from en­ergy firms Sub­sea 7 and Tul­low Oil helped Euro­pean shares, but banks weighed on in­dex-level gains as in­vestors awaited the out­come later yes­ter­day of the Fed­eral Re­serve’s two­day pol­icy meet­ing. Shares in Tul­low Oil jumped over 7pc at one stage.

“The in­di­ca­tions are more pos­i­tive on the out­look for en­ergy stocks,” said An­gelo Meda, head of equities at Banor SIM in Mi­lan, adding that firms had re­set ex­pec­ta­tions on val­u­a­tions and cleaned up their balance sheets.

“The out­look is not so bad. We are still miss­ing one com­po­nent which is the com­men­tary from big oil firms To­tal, BP, Royal Dutch Shell.”

The pan-Euro­pean STOXX 600 gained 0.4pc mid­way through the ses­sion, in line with Eu­ro­zone stocks and blue- chips, as oil and gas gained 0.7pc.

Ger­many’s Ifo busi­ness sur­vey on Tues­day showed con­fi­dence soar­ing to record highs in July amid what its economists de­scribed as a ‘euphoric’ mood in Ger­man in­dus­try, while US con­sumer con­fi­dence lev­els jumped to near 16-year highs.

The lat­ter num­bers helped the dol­lar re­cover some ground in US and Asian trad­ing yes­ter­day.

In Ire­land, the ISEQ Over­all In­dex had jumped 2.9pc to 6,893.47 by midafter­noon.

Shares in Per­ma­nent TSB plunged 15pc as it re­leased in­terim re­sults and said that the num­ber of non-per­form­ing loans on its books re­mains “un­sus­tain­ably high”.

Shares in Bank of Ire­land were slightly higher, while AIB was up al­most 0.9pc.

Other gain­ers in­cluded em­bat­tled Swiss-Ir­ish food group Aryzta, with its shares trad­ing 2.1pc higher in Dublin at €27.70.

The UK’s FTSE-100 was 0.35pc higher. Ger­many’s DAX was up 0.4pc and France’s CAC- 40 was 0.6pc higher.

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