May 18, 2018 / 7:36 AM / 8 months ago

European shares set to extend winning streak on oil surge, weak euro

MILAN, May 18 (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 political risk in Italy.

Earnings updates continued to drive single stock moves.

Richemont fell 7.7 percent after the luxury goods group posted a net profit that fell short of expectations, while a solid update from Ubisoft sent shares in the France’s biggest video game maker to a record high.

The pan-European STOXX 600 index fell 0.3 percent but remained near its highest level in more than three months and was up 0.7 percent on the week, while the FTSE was down 0.1 percent after hitting a record close on Thursday.

Italy’s FTSE MIB was down 0.2 percent, 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 fell 0.6 percent after Goldman Sachs removed the Italian state-controlled utility from its list of favourite 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. (Reporting by Danilo Masoni, editing by Helen Reid)

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