European equities fail to maintain gains
The rally in energy producers wasn’t enough for European equities to maintain their gains after U.S. data stocked concern about the economy as the Federal Reserve contemplates raising interest rates.
On Thursday the Stoxx Europe 600 Index gained less than 0.1 percent, almost completely erasing its advance in the last hour of trading. A report showed U.S. pending home sales slumped in August, just as Fed Bank of Atlanta President Dennis Lockhart said the central bank is nearing its goals of maximum employment and steady inflation near 2 percent.
Earlier, the Stoxx 600 rallied as much as 1.1 percent as a surprise OPEC agreement stoked confidence for an earnings recovery at energy companies.
The gains in energy producers came just as their valuations reached about 15 times estimated earnings, the lowest since January relative to the Stoxx 600. While the Stoxx 600 Oil & Gas Index jumped as much as 31 percent since January, the rebound lost steam in recent weeks as the commodity stalled.
Britain’s FTSE 100 Index rallied 1 percent, closing at its highest level since the 15th August high. The rally in commodity companies boosted the measure, which was the biggest gainer among major western-European markets. France’s CAC 40 Index gained 0.3 percent, while Germany’s DAX Index fell as much. The MSCI All Country World Index slid 0.6 percent as of 6:50 a.m. in New York, paring this quarter’s advance to 4 percent. The Stoxx Europe 600 Index slid 1.1 percent.
Crude oil fell 1 percent to $47.36 a barrel in New York, after gaining more than 7 percent over the last two days. While Wednesday’s agreement among Organization of Petroleum Exporting Countries imposed an overall production cap on the group of 14 oil producers, it didn’t assign individual limits — that was left to a committee that will report back at OPEC’s next meeting in November.