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* STOXX Europe 600 index up 1 pct
* Energy shares rally after OPEC deal
* Capita sinks 30 pct after profit warning
By Atul Prakash
LONDON, Sept 29 European equities climbed higher
on Thursday, with energy shares rallying after oil prices surged
overnight following a deal by OPEC members to limit crude
The Organization of the Petroleum Exporting Countries
reached an agreement in Algiers to cut production to a range of
32.5-33.0 million barrels per day. OPEC estimates its current
output at 33.24 million bpd.
The European oil and gas index soared 4.8 percent
and was poised for its best day in seven months. Tullow Oil
jumped 8.4 percent, while heavyweights Royal Dutch Shell
, Total and BP were up 4.5-5.7 percent.
"The OPEC agreement will make the return to market
equilibrium in the oil market easier and faster. Oil prices
going substantially above $50 a barrel could now happen in the
spring of 2017," said Ronny Claeys, senior strategist at KBC
"It is good news for oil companies, which can outperform
over the next six months."
However, some analysts said there was no certainty that the
move would take away the oversupply in the oil market as several
non-OPEC countries like Russia were pumping oil at an increased
level and U.S. shale supply could increase again.
"Nevertheless, this action will at least put a bottom under
oil prices and the energy sector. Whether this will be the start
of a new bull market will depend on the details of the deal,"
said Philippe Gijsels, head of research at BNP Paribas Fortis.
The pan-European STOXX 600 was up 1 percent by 0807
GMT, recording its third straight day of gains, also helped by
stronger mining shares.
The European basic resources index rose 2.8 percent
as prices of major metals advanced. Shares in Anglo American
rose 4.6 percent, the highest since the middle of 2015,
while Glencore rose 3.5 percent to its highest level in
more than one year.
However, Capita slumped 30 percent to a four-year
low and was on track for its worst one-day performance ever,
after the British outsourcing group cut its full-year profit
outlook, the second support services group to warn that clients
were delaying decisions following Brexit.
(Editing by Toby Chopra)