En­ergy boosts Euro­pean eq­ui­ties

Malta Independent - - FINANCIAL -

On Thurs­day a sur­prise OPEC agree­ment boosted con­fi­dence for earn­ings at en­ergy com­pa­nies, spark­ing a third day of gains in Euro­pean eq­ui­ties.

En­ergy pro­duc­ers and min­ers ral­lied af­ter a surge in oil as OPEC mem­bers agreed to cut pro­duc­tion for the first time since 2008. Royal Dutch Shell plc jumped 5.1% and To­tal SA gained 4.7%, their big­gest surges since Fe­bru­ary, while BP plc added 4.4%. Those helped the bench­mark Stoxx Europe 600 In­dex ad­vance 0.8% at 10.23am in Lon­don.

The re­bound that took the Stoxx 600 Oil & Gas In­dex up as much as 31% since Jan­uary failed to push higher in re­cent weeks as the com­mod­ity stalled. Yet an­a­lysts kept tem­per­ing their es­ti­mates for earn­ings de­clines, push­ing the val­u­a­tion of en­ergy pro­duc­ers to 15 times es­ti­mated earn­ings, the low­est since Jan­uary rel­a­tive to the Stoxx 600.

Thurs­day’s gains pushed the Stoxx 600 up for a third day, af­ter it slumped the most since July on Mon­day on growing concern about lenders, with Deutsche Bank AG fall­ing to a record. Bet­ter-than-forecast eco­nomic data in the US on Tues­day and the OPEC agree­ment on Wed­nes­day mean the gauge is now close to eras­ing its weekly loss and is on track for its first quar­terly ad­vance of the year.

Al­most all western-Euro­pean mar­kets rose on Thurs­day, with France’s CAC 40 In­dex and Italy’s FTSE MIB In­dex up more than 1.3%. Com­mod­ity pro­duc­ers Tech­nip SA, Saipem SpA and Te­naris SA led the ad­vances. The UK’s FTSE 100 In­dex gained 1.1%, while Germany’s DAX In­dex added 0.9%.

The jump in oil hurt air­lines. Deutsche Lufthansa AG, Air France-KLM Group and Ryanair Hold­ings plc fell more than 2%, drag­ging down a gauge of travel shares.

Asian stocks rose af­ter an agree­ment by OPEC to cut pro­duc­tion pushed up a re­gional gauge of en­ergy shares by the most since March. The MSCI Asia Pa­cific In­dex gained 0.5% to 141.52 as of 4.08pm in Hong Kong, set for its best quar­ter since the first three months of 2012, while the mea­sure of en­ergy com­pa­nies jumped 3.5% to the high­est in more than a year.

This ar­ti­cle was com­piled by Val­letta Fund Man­age­ment Lim­ited, a mem­ber of the BOV Group.Val­letta Fund Man­age­ment,TG Com­plex, Suite 2, Level 3, Brew­ery Str, Mriehel BKR 3000 Freep­hone: 80072344. E-mail: in­fovfm@bov.com. Web­site: www.vfm.com.mt. Val­letta Fund Man­age­ment Lim­ited is li­censed by the MFSA.

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