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Big oil, banks gives Europe stability, autos driven lower by Fiat
May 24, 2017 / 8:04 AM / 6 months ago

Big oil, banks gives Europe stability, autos driven lower by Fiat

LONDON (Reuters) - European shares, stuck just below 21-month highs for more than a week, struggled to gain momentum on Wednesday, with strength in oil producers was offset by weakness in mining and autos stocks.

Traders work in front of the German share price index, DAX board, at the stock exchange in Frankfurt, Germany, May 23, 2017. REUTERS/Staff/Remote

European oil & gas stocks .SXEP were lifted by BP (BP.L) and Royal Dutch Shell (RDSa.L), while banking shares .SX7P were also firmer, underpinning the pan-European STOXX 600 index, which was up 0.1 percent.

Among the national markets, Britain's FTSE 100 .FTSE rose 0.2 percent, while Germany's DAX .GDAXI fell 0.2 percent, weighed down by stocks including Hugo Boss (BOSSn.DE) and Evonik (EVKn.DE) going ex-dividend.

European auto stocks .SXAP were the biggest sectoral fallers, down more than 1 percent. They were led lower by a 2.5 percent fall in Daimler DIAGn.DE, which extended losses after its sites were searched on Tuesday by German prosecutors in an emissions probe, and a 1 percent fall in Fiat Chrysler (FCHA.MI).

Shares in the Italian carmaker recouped some of their earlier losses after the U.S. government sued it over emissions.

“This case is likely to take a long time (VW settled in 16 months) and should weigh on FCA’s share price for some time as the message regarding the execution of its 2018 plan is likely to be overwhelmed,” analysts at Barclays said in a note.

Miners were another weak spot with the basic resources index .SXPP declining 0.7 percent following a dip in copper.

Mining giant Glencore (GLEN.L) was also 1.1 percent lower after it said that it had made an informal approach to U.S. grains trader Bunge (BG.N) to discuss “a possible consensual business combination”.

On the positive side, a well-received set of fourth-quarter results from Dixons Carphone (DC.L) lifted its shares more than 4 percent, while Britvic’s (BVIC.L) first-half update also boosted its shares.

British retailer Kingfisher (KGF.L) was the biggest STOXX faller, however, down more than 6 percent after a trading update, while engineer Babcock (BAB.L) also fell 2.3 percent after its full-year results.

Shares in aerospace groups Safran (SAF.PA) and Zodiac (ZODC.PA), whose merger plans have been criticised by some investors, were suspended on Wednesday.

Editing by Vikram Subhedar and Alexander Smith

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