EUROPE MARKETS: European Stocks Grapple With Lower Liquidity, Oil-price Volatility
25 May 2017 - 10:06PM
Dow Jones News
By Carla Mozee, MarketWatch
Petrofac shares plunge
European stocks swung between gains and losses Thursday,
hampered by lower volume and a slide in oil prices following news
the Organization of the Petroleum Exporting Countries will hold
back from making deeper production cuts.
The Stoxx Europe 600 fell less than 1 point to 392.22, but has
been darting in and out of positive territory. Utilities, telecom
and consumer goods shares were holding higher, but commodity shares
were putting in the worst performance.
While major stock exchanges were open Thursday, Germany and
Switzerland were among the countries observing the Ascension
holiday.
Germany's DAX was down 0.1% at 12,625.99, but itself has been
higher during the session.
Intraday, the "DAX took a 100+ point plunge in the space of a
few minutes. This looks likely to be the result of a bank holiday
in Germany that makes for thinner liquidity and higher volatility
as a result," said Neil Wilson, senior market analyst at ETX
Capital, in a note.
"It's all very thin and choppy out there with French banks also
closed today."
France's CAC 40 index was back down by less than 1 point at
5,339.97. Italy's FTSE MIB was down 0.6% while Spain's IBEX 35
pared its gain to 0.4%.
The U.K.'s FTSE 100 was fractionally lower at 7,513.56
(http://www.marketwatch.com/story/ftse-100-wobbles-with-opec-decision-in-sight-2017-05-25)in
choppy trade.
Oil: The Stoxx Europe 600 Oil & Gas Index fell 0.9%,
reversing course after oil prices sank roughly 2%
(Oil%20slides%20below%20$51%20as%20OPEC%20agrees%20on%209-month%20output%20extension)
after Saudi Arabia's oil minister Khalid al-Falih ruled out deeper
cuts to oil production in any extension to an OPEC output deal.
OPEC's official announcement wasn't expected to arrive before 4
p.m. London time, or 11 a.m. Eastern Time, but reports, citing
unidentified sources, say a deal has been reached for a nine-month
extension to output cuts.
Read:OPEC says it will extend production cuts through March 2018
(http://www.marketwatch.com/story/opec-says-it-will-extend-production-cuts-through-march-2018-2017-05-25)
Oil prices have been climbing in recent weeks in anticipation
that OPEC and non-OPEC members would extend production cuts that
were agreed last November as they worked to tackle global oil
oversupply. But investors appeared disappointed that deeper cuts
won't be featured in an agreement.
In the European oil group, Italian oil producer Eni SpA (ENI.MI)
dropped 1.4%, BP (BP.LN) (BP.LN) gave up 1% and France's Total SA
(TOT) (TOT) shed 0.7%. Among oil services providers, Amec Foster
Wheeler PLC (AMFW.LN) fell 6.7% and Saipem (SPM.MI) gave up
2.3%.
Read:4 potential outcomes for OPEC's crucial meeting
(http://www.marketwatch.com/story/4-potential-outcomes-for-opecs-crucial-meeting-2017-05-19)
Meanwhile, shares of Petrofac Ltd. (PFC.LN) plunged 30% after
the oil services company said it suspended Chief Operating Officer
Marwan Chedid until further notice
(http://www.marketwatch.com/story/petrofac-suspends-coo-as-uk-conducts-probe-2017-05-25).
Petrofac is under U.K. investigation on suspicion of bribery,
corruption and money laundering, and the company has said it's
cooperating with authorities. Chedid has resigned from Petrofac's
board.
Stock movers: Daily Mail & General Trust PLC (DMGT.LN) slid
6.9% after posting a 76% fall in pretax profit
(http://www.marketwatch.com/story/daily-mail-general-trust-pretax-profit-slides-2017-05-25)
for the first half of fiscal 2017 as it booked costs related to the
company's restructuring. The result was in line with the
expectations set by the company, whose portfolio of businesses
include the Daily Mail newspaper.
Intesa Sanpaolo SpA shares (ISP.MI) fell 1.2% after a downgrade
of the Italian lender to hold from buy at Jefferies, which said
"valuation looks full with catalysts near-term less clear." A
price-target lift to EUR2.90 from EUR2.70 a share no longer leaves
sufficient upside to justify a buy rating, Jefferies said in a note
about European banks.
Meanwhile, the euro was buying $1.1215, not far off from $1.1220
logged late Wednesday in New York. The U.S. dollar was choppy late
Wednesday after minutes from the Federal Reserve's latest
policy-setting meeting showed policy makers appeared set to start
shrinking the bank's massive balance sheet.
The minutes also showed that most Fed officials said it would
"soon" be time to raise rates again.
Read:Seeing another rate hike 'soon,' Fed outlines plan to
reduce bond holdings, minutes show
(http://www.marketwatch.com/story/seeing-another-rate-hike-soon-fed-outlines-plan-to-reduce-bond-holdings-minutes-show-2017-05-24)
(END) Dow Jones Newswires
May 25, 2017 07:51 ET (11:51 GMT)
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