EUROPE MARKETS: European Stocks Shoved Down By Selloff In Oil Prices
June 20 2017 - 11:27AM
Dow Jones News
By Carla Mozee, MarketWatch
BOE's Carney says 'not yet the time' to hike interest rates
European stocks fell Tuesday, reversing gains as oil prices sank
toward bear-market territory, taking energy-related shares with
them.
The Stoxx Europe 600 fell 0.4% to 390.32, retreating from gains
logged Monday that left the index at its highest since June 5
(http://www.marketwatch.com/story/european-stocks-climb-with-french-market-higher-after-parliamentary-elections-2017-06-19).
As the market turned lower, only the consumer goods and health care
sectors held to gains.
Oil under pressure: The Stoxx Europe 600 Oil and Gas Index was
shoved 2.3% lower, losing the most since September as West Texas
Intermediate oil futures and Brent crude futures swung lower by
about 3%
(http://www.marketwatch.com/story/oil-hovers-at-seven-month-low-as-investors-weigh-up-supply-issues-2017-06-20).
WTI prices, trading below $44 a barrel, are down roughly 20% from
their most recent high
(http://www.marketwatch.com/story/oil-hovers-at-seven-month-low-as-investors-weigh-up-supply-issues-2017-06-20),
teetering around bear-market territory.
In the equipment and services group, Norwegian offshore engineer
Subsea 7 SA (SUBC.OS) dropped 3.9% and Dutch oil-services provider
SBM Offshore NV (SBMO.AE) fell 3.1%.
Among oil producers, Norway's Statoil ASA (STL.OS) was down 2.9%
and Spain's Repsol SA (REPYY) gave up 1.9%.
Worries about oversupply in the global oil market persist even
after the Organization of the Petroleum Exporting Countries and
other major oil producers in May have agreed to keep curbing
production into the first quarter of 2018.
"The assumption that extended OPEC supply cuts would underpin
the oil price is unravelling by the day. We would expect U.S. crude
to test $40 per barrel before any hopes of a sustainable recovery
in oil prices," wrote London Capital Group senior analyst Jasper
Lawler.
A weekly supply update is due late Tuesday from the American
Petroleum Institute. Analysts surveyed by S&P Global Platts
estimate U.S. oil inventories fell 2 million barrels last week.
U.K. rates on hold: European shares had been higher earlier in
the session, aided in part by the prospect that borrowing rates in
the U.K. are set to stay at a record low for the foreseeable
future. BOE chief Carney on Tuesday said in his delayed Mansion
House speech in London
(http://www.marketwatch.com/story/boe-chief-carney-too-early-to-lift-interest-rates-2017-06-20)
that "now is not yet the time" to begin to lift the bank's key
interest rate from its current 0.25%.
"It would appear that the BOE chief wants to keep monetary
policy loose as there is so much uncertainty surrounding the Brexit
negotiations, which started yesterday," said David Madden, analyst
at CMC Markets UK, in a note.
"Some traders feel that Mr. Carney was too aggressive in his
easing of monetary policy in the awake of Brexit, and now it seems
that he doesn't want to increase interest rates in case he has to
cut them again."
Read Brett Arends: Brexit threatens to become a fiasco -- and
investors are in denial
(http://www.marketwatch.com/story/brexit-threatens-to-become-a-fiasco-and-investors-are-in-denial-2017-06-19)
And check out:Forget Trump and Brexit -- this is what elite fund
managers are watching
(http://www.marketwatch.com/story/this-is-what-elite-fund-managers-are-watching-closely-and-its-not-trump-or-brexit-2017-06-19)
(http://www.marketwatch.com/story/brexit-threatens-to-become-a-fiasco-and-investors-are-in-denial-2017-06-19)
Carney's remarks had earlier helped pull the U.K.'s FTSE 100 out
of the red
(http://www.marketwatch.com/story/ftse-100-flips-higher-as-central-bank-boss-wants-rates-held-steady-2017-06-20)
as the British pound fell below $1.27
(http://www.marketwatch.com/story/pound-slides-to-1-week-low-after-boes-carney-dashes-hopes-of-a-rate-hike-2017-06-20).
But the selloff in oil prices drove that benchmark down as well,
losing 0.4% at 7,542.55.
Stock movers: Barclays PLC (BCS) (BCS) fell 1.4% after the U.K.
Serious Fraud Office charged the bank and four former executives
with conspiracy to commit fraud
(http://www.marketwatch.com/story/barclays-4-former-top-execs-charged-with-fraud-2017-06-20)
in a case related to fundraising in Qatar during the financial
crisis.
Shares of German lighting manufacturer Osram Licht AG (OSR.XE)
marched up 3.5%, to top the Stoxx 600. The move came after a
ratings upgrade to buy at Bankhaus Lampe, according to Dow Jones
Newswires.
Indexes: Germany's DAX 30 fell 0.3% to 12,853.16, backing away
from Monday's record close. France's CAC 40 turned fractionally
lower to 5,309.24. Spain's IBEX 35 was off 0.6% at 10,783.10.
Economic data: The eurozone's current account surplus narrowed
to 22.2 billion euros in April
(http://www.marketwatch.com/story/eurozone-current-account-surplus-narrows-2017-06-20).
(END) Dow Jones Newswires
June 20, 2017 11:12 ET (15:12 GMT)
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