EUROPE MARKETS: European Stocks End Lower, Led By Petrofac's 30% Plunge
May 25 2017 - 12:37PM
Dow Jones News
By Carla Mozee and Victor Reklaitis, MarketWatch
European markets grapple with lower liquidity, crude's
crumble
European stocks notched a slight loss 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.
Shares in Petrofac Ltd. (PFC.LN) led the way lower, plunging 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).
The Stoxx Europe 600 fell 0.1% to end at 392.14, after darting
in and out of positive territory during the session.
While major stock exchanges were open Thursday, Germany and
Switzerland were among the countries observing the Ascension
holiday.
Germany's DAX was down 0.2% to end at 12,621.72, but had 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."
Petrofac was the biggest loser Thursday among Stoxx Europe 600
components. The company is under U.K. investigation on suspicion of
bribery, corruption and money laundering, and it has said it's
cooperating with authorities. Chedid has resigned from Petrofac's
board.
France's CAC 40 index was down 0.1% to finish at 5,337.16, while
the U.K.'s FTSE 100 finished fractionally higher at 7,517.71
(http://www.marketwatch.com/story/ftse-100-wobbles-with-opec-decision-in-sight-2017-05-25)
following choppy trade.
Crude crumbles: The Stoxx Europe 600 Oil & Gas Index fell
1.2%, reversing course after oil prices sank roughly 2%
(Oil%20slides%20below%20$51%20as%20OPEC%20agrees%20on%209-month%20output%20extension)
as Saudi Arabia's oil minister Khalid al-Falih ruled out deeper
cuts to oil production in any extension to an OPEC output deal.
But reports said the Organization of the Petroleum Exporting
Countries did agree to a nine-month extension to the current deal
at Thursday's meeting in Vienna, Austria, as expected.
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 1.9%, BP PLC (BP.LN) (BP.LN) gave up 1.1%, and France's
Total SA (TOT) (TOT) shed 0.9%. Among oil services providers, Amec
Foster Wheeler PLC (AMFW.LN) fell 5.6% and Saipem SpA (SPM.MI) gave
up 3.1%.
Other movers: Daily Mail & General Trust PLC (DMGT.LN) slid
6.9% after posting a 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.
Intermediate Capital Group PLC (ICP.LN) closed 14% higher after
the investment manager reported a rise in both its profit and its
dividend
(http://www.icgam.com/shareholders/documents/Full%20year%20results%20announcement.pdf).
Meanwhile, the euro was buying $1.1224, not far off from $1.1220
logged late Wednesday in New York. The U.S. dollar was slightly
lower after minutes from the Federal Reserve's latest meeting out
Wednesday 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 bondholdings, 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 12:22 ET (16:22 GMT)
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