Saturday 18 November 2017

Energy producers push European stocks up

Traders work on the floor of the New York Stock Exchange. Reuters
Traders work on the floor of the New York Stock Exchange. Reuters

A surge in energy producers pushed European shares up yesterday.

By mid-afternoon in Dublin, the ISEQ Overall Index was up 0.34pc or 20.88 points to 6,153.81.

The mid-afternoon leaders on the Dublin market included speciality baker Aryzta, which was up 2.6pc to €59.52 after French banking giant Societe General upgraded the stock to buy from hold.

Ryanair increased 1pc to €11.17, while CPL Resources was up 1.3pc to €5.88.

On the other side of the board, the laggards included Permanent TSB, which dropped 7.5pc to 6 cents as the state-owned lender held its Annual General Meeting (AGM).

Building materials group CRH dropped 0.9pc to €24.20 and bookmakers Paddy Power was down 0.7pc to €79.84.

Elsewhere, the Stoxx Europe 600 Index added 0.2 percent at 12.05pm in London, and climbed to as high as 405.73, surpassing the March 2000 closing level.

BG Group jumped 35pc, the most ever, after Royal Dutch Shell agreed to buy it for £47bnin cash and stock.

The Stoxx 600 has climbed 18pc this year, including its biggest jump in 10 weeks on Tuesday, on optimism central banks will support the economy.

The European Central Bank (ECB) began a quantitative-easing programme that sparked a slump in the euro versus the dollar, helping exporters further. "M&A is normally quite good for sentiment," said Christian Zogg, of LLB Asset Management in Vaduz, Liechtenstein.

"QE is working for the moment. I hope that first-quarter results will start to show the benefit of a weaker currency. In my view, it should."

Gains in BG pushed a gauge of oil and gas shares to the best performance among 19 industry groups.

Galp Energia SGPS SA, BG's partner in Brazilian fields, jumped 4.4pc. That pushed Portugal's PSI 20 Index to the biggest increase among western-European markets and its highest level since July. Shell fell 2.1pc.

BG is poised for its highest close since July 2014. It rose the most in six years on Tuesday before takeover talks were reported, and bullish options volume increased on April 2.

Mining shares also advanced, with Anglo American and BHP Billiton gaining more than 1.6pc.

An index of car companies posted the worst drop among 19 industry groups. BMW and Peugeot Citroen slipped more than 1.7pc after Kepler Cheuvreux downgraded the shares.

Investors were also seeking clues on the timing of the Federal Reserve's first interest-rate increase since 2006.

The dollar fell, retreating from a near three-week high hit against the yen the previous day, after the Bank of Japan kept monetary policy unchanged despite slowing inflation.

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