Wednesday, 09 May 2018 09:00

European equities rally, boosted by gains for oil stocks

Rate this item
(0 votes)

European equities rose on Wednesday, helped by a rally for energy stocks as oil prices gained.

Crude was advancing in the wake of U.S. President Donald Trump’s much-anticipated decision to withdraw from an Iran nuclear deal and reimpose sanctions on the oil-producing nation — a move that could reduce global crude supplies.

What are markets doing?

The Stoxx Europe 600 index SXXP, +0.26%[1] gained 0.2% to 390.73, putting the pan-European index on track for its fourth up session in a row[2].

The U.K.’s FTSE 100 UKX, +0.48%[3] tacked on 0.4% to 7,595.87, while Germany’s DAX 30 DAX, +0.20%[4] added 0.1% to 12,924.44. France’s CAC 40 PX1, +0.05%[5] was roughly unchanged at 5,521.75.

The euro EURUSD, -0.0674%[6] bought $1.1843, down slightly from $1.1864 late Tuesday in New York. Retreats by the currency tend to bolster the overseas revenue generated by Europe’s multinational companies.

Check out: 8 reasons to ditch the euro right now[7]

What is driving the markets?

Trump announced on Tuesday that the U.S. was abandoning a 2015 Iran nuclear deal[8]. He hinted at an openness on the part of the U.S. to negotiations, and analysts said that was helping equity markets avoid a sizable selloff. Even so, the withdrawal puts Washington at odds with European allies.

Encouraging first-quarter earnings reports also were providing a lift on Wednesday.

What are strategists saying?

“The reason why the broader sentiment was not affected could be Trump’s willingness to enter talks if Iran agrees to do so, and/or the prospect of Iran staying in the deal, even without the U.S.,” said Charalambos Pissouros, senior market analyst at JFD Brokers, in a note.

Stocks in focus

Among energy stocks, Tullow Oil PLC shares TLW, +4.93%[9] shot up 5.1%, while Royal Dutch Shell PLC RDSA, +2.16%[10] ...

Read more from our friends at MarketWatch

Read 595 times