Energy Shares Rise as Crude Gains -- Update
December 12 2017 - 5:39AM
Dow Jones News
By David Hodari and Gregor Stuart Hunter
-- Brent crude hits 2 1/2 -year high
-- Europe tech sector bucks Asian negativity
-- Investors await Draghi speech
European stocks gained Tuesday, with buoyant technology and
oil-and-gas shares outweighing broad-based weakness.
The Stoxx Europe 600 rose 0.2% in midmorning trading, while the
euro rose 0.1% to $1.1782. A stronger euro tends to weaken shares
of European multinationals that translate revenues from abroad.
The European tech sector received a boost, with Atos shares up
5.3% on its bid for Dutch software firm Gemalto, which itself rose
32.6%. The Stoxx Europe 600 technology sector rose 1.1%.
The Stoxx Europe 600's oil-and-gas sector also gained, rising
1%, with Statoil up 2.1% and Tullow Oil up 2.2%. Moves in other
sectors were mild.
Brent Crude, the global benchmark, was up 1.1% at $65.37 a
barrel after surpassing $65 a barrel Monday for the first time
since June 2015. That followed the news that the major Forties
North Sea pipeline will temporarily close after a fracture was
found.
Rising oil prices helped Australia's commodities-heavy
S&P/ASX 200 index buck the negativity of the broader Asian
region and finish 0.2% higher.
Asian stocks mostly pulled back, with regional tech shares
reversing gains made Monday.
Hong Kong's Hang Seng Index fell 0.6%, led by a 3% drop in
heavyweight Tencent Holdings. Tencent's fall came after it
disclosed that one of its units is in talks to acquire a minority
stake in supermarket operator Yonghui.
Camera-maker Sunny Optical, a Hang Seng newcomer, slid another
7.4% after it said that Chinese mobile-phone shipments in November
fell 21% from a year earlier.
Taiwan's tech-heavy Taiex fell 0.3% and Korea's Kospi slipped
0.4%, despite a 0.6% gain for index heavyweight Samsung
Electronics.
That tech weakness, and a 0.1% rebound for the yen versus the
dollar to Yen113.4860, helped push the Nikkei down 0.3% in late
trading.
Regional selling also stung Chinese stocks, with the Shanghai
Composite down 1.3% and the Shenzhen Composite down 1%.
That Chinese equity weakness came despite credit data released
late Monday that showed resilient bank lending in November, with
some money leaving the shadow-banking sector.
Investors were awaiting cues from global central banks. The
Federal Open Market Committee's two-day meeting is set to begin
Tuesday, with its interest rate decision due Wednesday. Data from
CME Group showed investors were betting on a 100% probability that
the Fed will announce a rate increase.
U.S. 10-year Treasury yields ticked down to 2.381% from 2.387%
late Monday, while German 10-year bond yields moved up to 0.296%
from 0.288%. Yields move inversely to prices.
The European, British, Swiss and Norwegian central banks are
also scheduled to meet this week, with European Central Bank
President Mario Draghi due to give a speech Tuesday.
"The main focus from Draghi is that we'll get new economic
forecasts and we'll get 2020 [forecasts] for the first time... he
may also give more detail on how [the ECB] plans to scale back
purchases to EUR30 billion [$35 billion] from EUR60 billion. Will
they halve all purchases or take a more nuanced approach?" said
James Knightley, chief international economist at ING.
Bitcoin prices slipped after Securities and Exchange Commission
Chairman Jay Clayton warned about the risks to retail investors in
the red-hot cryptocurrency. Coindesk's Bitcoin USD Price Index was
recently up 1.5% at around $16,944.23 after nearing $17,400 in late
New York trading.
Write to David Hodari at David.Hodari@dowjones.com and Gregor
Stuart Hunter at gregor.hunter@wsj.com
(END) Dow Jones Newswires
December 12, 2017 05:24 ET (10:24 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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