EUROPE MARKETS: European Stocks Struggle As Oil, Auto Shares Pull Back
May 26 2017 - 6:36AM
Dow Jones News
By Carla Mozee, MarketWatch
Trump complains about German car sales in the U.S., Der Spiegel
reports
European stocks were in the red Friday, putting the regional
benchmark on track for a weekly decline, with oil and gas shares
pulled lower on disappointment stemming from OPEC's agreement to
extend production cuts.
The Stoxx Europe 600 fell 0.5% to 390.16, with energy and
financial shares faring the worst. But health care, telecom and
consumer services shares held to small gains.
The Stoxx Europe 600 Oil & Gas Index slumped 1.3%, under
pressure after oil prices sank Thursday. The selloff came as the
Organization of the Petroleum Exporting Countries and non-OPEC
members didn't include deeper crude-output cuts as part of a
renewed agreement
(http://www.marketwatch.com/story/opec-says-it-will-extend-production-cuts-through-march-2018-2017-05-25)
to cap production through March 2018. Output will remain at 1.8
million barrels a day.
Among oil-services companies, shares of Subsea 7 SA (SUBC.OS)
fell 4.6%, TechnipFMC PLC (FTI.FR) was down 2.8% and SBM Offshore
NV (SBMO.AE) moved 1.6% lower.
Among oil producers, OMV AG was lower by 3.8%, Statoil ASA
(STL.OS) was drawn 1.7% lower and France's Total SA (TOT) gave up
1.9%.
Energy shares remained lower even as oil prices on Friday turned
slightly higher after Thursday's nearly 5% slide for West Texas
Intermediate crude to below $49 a barrel.
"OPEC fell short of providing an upside surprise factor beyond
what was already priced in," said Helima Croft, head of commodity
strategy at RBC Capital Markets, in a Thursday note.
The drop in oil prices "is a function of a corner of the market
that remains skeptical on the impact of OPEC's cuts. The market
will remain hesitant and wait for data confirmation before prices
can move materially higher," she wrote.
However, OPEC's announcement "will ultimately help to reset the
base for prices in the low $50-a-barrel range and act to refocus
attention squarely on forward looking fundamentals," Croft
wrote.
Read:16 energy stocks that company executives love, regardless
of what OPEC does
(http://www.marketwatch.com/story/16-energy-stocks-that-company-executives-love-regardless-of-what-opec-does-2017-05-25)
The pressure on oil shares is contributing toward what will
likely be a weekly loss of 0.3% for the Stoxx Europe 600.
Stock movers: On the German DAX 30, shares of auto makers were
lower after a Der Spiegel newspaper report
(http://www.marketwatch.com/story/trump-reportedly-suggested-limiting-german-car-sales-2017-05-25)
that U.S. President Donald Trump complained to European officials
about Germany's exports. Trump reportedly said the Germans sell
"millions" of cars in the U.S., and "we'll stop that."
Shares of BMW AG (BMW.XE) fell 1.4%, Daimler AG (DAI.XE) was
down 0.9$ and Volkswagen AG (VOW.XE) fell 1%.
Petrofac Ltd. (PFC.LN) was down 5.2%, extending its 30% plunge
in the previous session 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 company is under U.K. investigation on suspicion of bribery,
corruption and money laundering. Petrofac said it's cooperating
with authorities.
Spirax-Sarco Engineering PLC (SPX.LN) jumped 6.4% after the
steam-system engineering company said it's buying Chromalox Inc. in
a $415 million deal
(http://www.marketwatch.com/story/spirax-sarco-buys-chromalox-for-415-million-2017-05-26).
Indexes: Germany's DAX was down 0.5% at 12,561.36. France's CAC
40 index flopped down 0.8% to 5,292.57 and Italy's FTSE MIB fell
1%.
The U.K.'s FTSE 100 was up 0.1% at 7,525.43, and earlier touched
an all-time high
(http://www.marketwatch.com/story/ftse-100-at-all-time-high-with-the-pound-knocked-below-129-2017-05-26)
aided by a drop in the pound after a poll showed the Conservative
Party's lead shrinking before the June 8 general election.
The euro bought $1.1217, not far off from $1.1217 late Thursday
in New York.
(END) Dow Jones Newswires
May 26, 2017 06:21 ET (10:21 GMT)
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