Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Oil boom sets European shares for best weekly streak since 2014

Stock MarketsMay 18, 2018 04:58AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Traders work at their desks in front of the German share price index, DAX board, at the stock exchange in Frankfurt

By Danilo Masoni

MILAN (Reuters) - European shares dipped in morning trading on Friday but were on course for eight straight weeks of gains, supported by a rally in energy shares and a weaker euro, which helped investors shrug off worries over Italy.

The pan-European STOXX 600 (STOXX) index fell 0.3 percent by 0827 GMT but remained near its highest level in more than three months and was up 0.5 percent on the week, while the FTSE (FTSE) fell 0.2 percent from a record close on Thursday.

The last time the STOXX rose eight weeks in a row was in May 2014. After a turbulent start of the year, equities in Europe have been buoyed by a surge in crude prices to $80 which has prompted investors add exposure to the energy sector.

"Within our positive view on overall commodities, we remain neutral on energy. We prefer to gain exposure through energy equities, which have positive cash flows and efficient cash management," the Investment Strategy Department of Credit Suisse (SIX:CSGN) said in a note.

The oil and gas index (SXEP) is up more than 14 percent year to date, comfortably leading sectoral gainers in Europe. On Friday shares in the sector were taking a breather with shares in oil majors Eni (MI:ENI), Royal Dutch Shell (L:RDSa) and Total (PA:TOTF) trading down between 0.5 and 0.9 percent.

The drop in the euro against a surging dollar has also helped ease worries that currency headwinds could erode earnings for export oriented companies. The weaker euro prompted Kepler upgrade German equities earlier this month.

Italy's FTSE MIB (FTMIB), down 0.2 percent, however has lagged and was set for its second straight week of losses as investors grew wary that a government accord between two anti-establishment parties could reduce fiscal discipline in the euro zone's third largest economy.

Enel (MI:ENEI) fell 0.6 percent after Goldman Sachs (NYSE:GS) removed the Italian state-controlled utility from its list of favorite stocks, saying the energy policy plans of the 5-Star and League parties could dent prices.

Italian banks, considered a proxy for political risk in the country due to their government bond holdings, and utilities are seen as most exposed to government polices, while exporters are considered relatively safer.

Elsewhere, earnings updates were behind the biggest moves.

Richemont (S:CFR) fell 7.7 percent after the luxury goods group posted a net profit that fell short of expectations, partly due to buying back inventory, and said it could target strategic investments and divestments.

"We see the higher-than-expected inventory buybacks, slight miss on underlying EBIT and lower-than-expected dividend as being slightly disappointing," UBS analysts said.

A solid update from Ubisoft (PA:UBIP) sent shares in the France's biggest video game maker to a record high.

Oil boom sets European shares for best weekly streak since 2014
 

Related Articles

German auto giants place their bets on hydrogen cars
German auto giants place their bets on hydrogen cars By Reuters - Sep 22, 2021

By Nick Carey MUNICH (Reuters) - Battery power may be the frontrunner to become the car technology of the future, but don't rule out the underdog hydrogen. That's the view of some...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email