Rising oil stocks lift European markets
European shares inched up yesterday after a choppy session as higher Brent crude prices lifted oil stocks to their highest level since September 2014, offsetting a drop in telecoms.
The STOXX 600 index rose 0.1pc, reversing weakness seen in morning trade after weak data from China and Germany added to a spate of less encouraging news on the global economy.
Shares in oil majors BP, Royal Dutch Shell, Total and Eni rose between 0.4pc and 1.3pc as oil prices hit multiyear highs on concerns about US sanctions on Iran, which are likely to restrict crude oil exports.
The oil and gas index is by far the best sectoral performer in Europe so far this year, up nearly 13pc. Although crude oil prices retreated, the index rose 0.9pc.
"We continue to like the sector - particularly given the strength of support for cash distributions - but the stocks' upsides to our target prices have become much more muted after the sector's outperformance," said HSBC in a note.
Financials supported European equities with Raiffeisen and Commerzbank rising 4.6pc and 3.9pc respectively following strong earning updates.
The earnings season was nearing its close with more than three-quarters of MSCI Europe companies having reported first-quarter results.
Telecoms were the biggest sectoral weigh to the STOXX, falling 2pc.
Vodafone fell 4.3pc after the world's second largest mobile operator said its boss was leaving.
French satellite firm Eutelsat tumbled 12pc after warning it could fall short of its full-year revenue target and Iliad shares sank 19pc after a management reshuffle and weak first-quarter results.