Oil rally helps energy stocks lead European stocks higher | Invest News

By Sagarika Jaisinghani and Ambar Warrick

(Reuters) – European stocks finished higher on Thursday as a rally in crude prices saw energy stocks rise more than 2%, while strong earnings reports helped allay some concerns about the variant infectious “Delta” of the coronavirus.

The pan-European STOXX 600 closed 0.6% higher at 455.63 points as energy stocks marked their best day in a month. Energy service provider TechnipFMC Plc was the industry’s first winner, growing 4.4%.

Oil prices rose nearly $ 2 on the prospect of increased global demand, while lower US crude inventories helped. Reuters also reported that OPEC will increase production less than expected, which could lead to a supply shortage and support oil prices later this year.

This approach comes amid a spreading Delta variant, which still has an impact on mobility in certain geographies. In addition, Washington’s negotiations with Iran could also close a substantial part of the expected deficits in the region. ‘future,’ TD Securities analysts wrote in a note.

“A summer breakout in energy markets may continue to gain momentum with artificially limited supply.”

Travel-related stocks jumped 1.9% after falling for four consecutive days over fears of further restrictions following an increase in the number of COVID-19 cases in Asia and the UK.

Airlines EasyJet, IAG, owner of British Airways, and Ryanair rose 1.5% to 4%.

The STOXX 600 was now 1% off a record set in June, as growing optimism about a vaccine-led economic recovery this year pushed sentiment to a 21-year high.

GRAPHIC-STOXX 600 less than 1% below June peak – https://fingfx.thomsonreuters.com/gfx/mkt/dgkplrlkzpb/STOXX%20600%20record.PNG

Thursday’s figures confirmed that the eurozone’s manufacturing sector grew at its all-time high last month.

The German DAX rose 0.5%, with data showing retail sales in Europe’s largest economy rebounded in May.

Tech stocks, which had outperformed during the pandemic, were the only losers of the day, down 0.7%. Investors were probably comfortable looking to sectors more exposed to an economic recovery.

Associated British Foods rose 4.8% as it said third-quarter sales of its Primark fashion stores which reopened after COVID-19 closings were ahead of expectations in all markets.

The French restaurant and catering group Sodexo grew by 2.3% after boosting its revenue and profit margin forecasts in the second half of the year, betting on the complete reopening of American schools.

Sodexo’s peer, Denmark’s ISS, jumped 6.6% to the top of the STOXX 600, after the news broke.

Fashion retailer H&M, on the other hand, fell 1.1% as second-quarter profits remained well below pre-pandemic levels.

(Reporting by Sagarika Jaisinghani, Julien Ponthus and Ambar Warrick; Editing by Uttaresh.V and Lisa Shumaker)

Copyright 2021 Thomson Reuters.

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