Wednesday 22 November 2017

Oil producers drag European stocks lower as week closes

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange (NYSE)

Namitha Jagadeesh

European stocks declined, extending their drop for a second week, as energy producers retreated after an Opec output deal failed go beyond a plan flagged days earlier.

Irish shares were little changed, though. The ISEQ Overall Index was up just 0.03pc, or 2.07 points, to end the trading week at 6,973.83.

The leaders on the Dublin market included Ryanair, which was up 1.7pc to €17.93, while dairy company Glanbia rose 1pc to €17.95.

On the other side of the board, the laggards included building materials group CRH, which slipped 0.5pc to €31.94, while Kingspan dropped 1.2pc to €31.05.

Elsewhere, the Stoxx Europe 600 Index dropped 0.2pc at the close, also weighed down by losses in bank shares. Oil and gas stocks yesterday deepened this year's worst performance among industry groups. Oil is poised to decline for the week following yesterday's slump, the biggest in three weeks, after Opec moved to prolong supply cuts for nine months.

"The lack of deeper cuts, or a longer duration, sent the WTI below $48.92," Ipek Ozkardeskaya, a market analyst at London Capital Group, wrote in a note, referring to the benchmark West Texas Intermediate crude future.

"Failure to regain this level would suggest a short-term bearish reversal on the pre-Opec positive trend."

The exporter-heavy FTSE 100 Index added 0.3pc to close at a record high. The FTSE 250 Index of midcaps added 0.3pc and earlier surpassed the 20,000 level intraday for the first time. After years of currency weakness boosting companies dependent on overseas sales amid unprecedented monetary stimulus, stocks reliant on the domestic economy are beginning to outperform in Europe as the euro strengthens. Strategists from firms including JPMorgan Chase, BNP Paribas and Kepler Cheuvreux say the trend will pick up pace.

Bloomberg

Irish Independent

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