By Carla Mozee, MarketWatch
Crude rally helps lift oil and gas stocks
European stocks steadied at a near two-week high Wednesday,
finding support from gains in the oil and gas sector on the back of
rising crude oil prices.
But stocks in the travel sector came under pressure after Thomas
Cook Group PLC flagged a price battle in the Spanish market.
What markets are doing: The Stoxx Europe 600 was up less than 1
point at 388.15, after swaying between tiny gains and losses. On
Tuesday, the pan-European index rose 0.4%
(http://www.marketwatch.com/story/european-stocks-look-for-2nd-straight-win-despite-choppy-trade-2017-11-21)
to close at its highest since Nov. 10, according to FactSet
data.
In Wednesday's session, utility, and oil and gas shares led the
advancers, while tech and consumer services shares led the
decliners.
German and French stocks pulled back from small gains earlier in
the session, after hitting nearly two-week highs on Tuesday. In
Frankfurt, the DAX 30 index lost 0.3% to reach 13,129.02, and in
Paris, the CAC 40 shed 0.1% to hit 5,359.86.
But Spain's IBEX 35 index was up 0.4% at 10,028.30. In London,
the FTSE 100 index was up 0.3% to 7,429.77 ahead of the launch of
the U.K. government's tax and spending plans.
The euro bought $1.1764, more than $1.1738 late Tuesday in New
York. Against the pound, the shared currency fetched GBP0.8878,
slightly higher than GBP0.8867 late Tuesday.
What's driving markets: Energy stocks were bolstered by a rise
in crude prices , with the Stoxx Europe 600 Oil & Gas up
0.5%.
The gains for oil came on optimism about supply, after the
American Petroleum Institute late Tuesday reported a
larger-than-expected estimated decline in U.S. crude. Investors
will watch U.S. government supply data due at 10:30 a.m. Eastern
Time, or 3:30 p.m. London time, for confirmation of that drop.
In the U.K., the Conservative-led government will present its
first budget since the snap general election in June. Chancellor of
the Exchequer Philip Hammond is seen as having little room to
maneuver as the Conservatives don't have a parliamentary majority
on their own. The Autumn Budget is expected to be revealed in
parliament at around 12:30 p.m. London time, or 7:30 a.m.
Eastern.
Read:5 things to watch for in U.K. budget
(http://www.marketwatch.com/story/5-things-to-watch-for-in-uk-budget-2017-11-22)
After the close of European trade, the minutes from the U.S.
Federal Reserve's meeting earlier this month will be released
(http://www.marketwatch.com/story/fed-minutes-likely-to-greenlight-rate-hike-in-december-but-inflation-debate-still-unsettled-2017-11-21).
The minutes are widely expected to show the central bank is still
on course to raise its benchmark short-term interest rate to a
range of 1.25% to 1.5% in December.
What strategists are saying: "We may not expect to see too much
today in terms of FTSE 100 or pound moves, unless the Chancellor
breaks the mold and announces polices out of left field that could
have a significant effect on what Brexit means for businesses, or
measures that will ease the pressures on the economy as the U.K.
enters in 2018, a year that holds far more economic questions than
it does answers,"
-- James Hughes, chief market analyst at Axi Trader, in a
note.
"Coming with the API announcing a larger than expected drawdown
in U.S. oil stocks, suddenly the recent highs on oil are back in
range. This jumped has helped to support improved sentiment, which,
along with recent positive U.S. economic data, has driven equity
markets to rise once again."
-- Richard Perry, market analyst at Hantec Markets, in a
note
Travel stocks: Thomas Cook shares (TCG.LN) tumbled 11% after the
travel services company said in its full-year 2017 earnings report
(http://www.marketwatch.com/story/thomas-cook-margins-take-a-hit-shares-fall-2017-11-22)
that gross margin was reduced in part because of a competitive
market in Spain. The company's fiscal pretax profit rose to GBP46
million.
"Demand for our holidays to Turkey and Egypt is very strong,
which we expect will start to alleviate the margin pressures caused
by the high concentration of holidays to Spain in 2016 and 2017,"
said Thomas Cook in its report.
The Stoxx Europe 600 Travel & Leisure Index was down 0.2%,
hurt by the slide for Thomas Cook. Shares of rival travel services
company TUI AG fell 1.%, but pared deeper losses earlier in the
session.
Energy stocks: In the oil and gas group, Tullow Oil PLC (TLW.LN)
climbed 3.5%, Total SA (TOT) added 0.7%, and Repsol SA (REPYY)
picked up 1.1%. A Repsol-led consortium plans to invest $900
million for exploration and production in southern Bolivia
(http://www.marketwatch.com/story/repsol-led-group-to-invest-900m-in-bolivia-efe-2017-11-22).
Other movers: Schibsted ASA shares (SCHA.OS) dropped 8% after
the Norway-based media company said it has completed the placement
of 11.88 million new B-shares, equal to 2.5% of existing total
share capital. Gross proceeds came in at 2.51 million Norwegian
kroner ($305 million).
Akzo Nobel NV (AKZOY) shares were up 1.7% after the Dutch paint
company and its U.S. rival Axalta Coating Systems Ltd. (AXTA) said
they've abandoned talks to merge.
(http://www.marketwatch.com/story/akzo-nobel-in-merger-talks-with-uss-axalta-2017-10-28)
(END) Dow Jones Newswires
November 22, 2017 05:59 ET (10:59 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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