EUROPE MARKETS: Europe Markets Climb As Oil Prices Rise On Tanker Incident
June 13 2019 - 7:09AM
Dow Jones News
By Dave Morris
Europe markets were lifted by rising oil prices sparked by news
of an incident involving two oil tankers near the Strait of
Hormuz.
How did markets perform?
The Stoxx 600 was up 0.2% to 380.6 after sinking 0.3%
Wednesday.
The U.K.'s FTSE 100 also edged up 0.2%, following Wednesday's
0.4% decline.
The pound ticked down 0.1% to $1.2674. It traded flat
Wednesday.
In Germany, the DAX increased 0.5% to 12,172.9, erasing
Wednesday's 0.3% slump.
France's CAC 40 rose 0.1% to 5,379.4. On Wednesday it dropped
0.6%.
Italy's FTSE MIB bounced 0.7% to 20,612.5, eliminating the 0.7%
fall it saw Wednesday.
Oil rallied significantly on news of an incident in the Gulf of
Oman. The West Texas intermediate (WTI) benchmark was up 2.8% to
$52.59/bbl, while the Brent contract was 3.2% higher at
$61.90/bbl.
What's moving the markets?
With little in the way of market-moving news, investors are
again weighing the potential impact of the U.S.-China trade war on
policy and markets.
In a whirlwind 10-day tour of Chinese officials and
businesspeople, Bloomberg reporter Shawn Donnan came to the
conclusion
(https://www.bloomberg.com/news/articles/2019-06-12/tour-of-china-shows-a-nation-girding-for-protracted-trade-war)
that the country is battening the hatches for a long trade war with
the U.S. Such dispatches have battered the optimism of those who
argue that a long dispute is unlikely, and policy makers around the
world do not appear inclined to wait and see whether it gets
resolved.
A Reuters poll
(https://www.reuters.com/article/us-usa-economy-poll/trade-war-risks-forcing-fed-rate-cut-this-year-say-economists-reuters-poll-idUSKCN1TE017?il=0)
of economists said the chances of an interest-rate cut by the U.S.
Federal Reserve have risen sharply, citing trade tensions. Analysis
in the FT
(https://www.ft.com/content/0753f3f6-8ced-11e9-a1c1-51bf8f989972)
suggested traders appear to be shrugging off potential stimulus by
the European Central Bank, as neither the euro nor bond yields
reacted as expected to last week's dovish talk at the ECB meeting.
And China Daily reported
(http://www.chinadaily.com.cn/a/201906/13/WS5d018647a310176577230d74.html)that
economists expected a cut in the reserve requirement ratio (RRR),
as well as possible interest rate cuts, to counter trade war
related tension, citing private sector economists as well as an
interview with People's Bank of China Governor Yi Gang.
London Capital Group senior market analyst Ipek Ozkardeskaya
wrote: "Provided the unpromising headlines across the globe,
investors believe that it may be wiser to move toward the safe
haven assets," and pointed to strength in the Japanese Yen, the
Swiss franc and gold.
In the U.K., Conservative MPs begin the first round of voting to
choose a leader to replace outgoing Prime Minister Theresa May. A
key aspect of the debate among the leading candidates is whether
they would consider, as Dominic Raab has suggested, suspending
Parliament to push through a no-deal Brexit. While front-runner
Boris Johnson has publicly said he is "strongly not attracted" to
such an outcome, The Times reported
(https://www.thetimes.co.uk/edition/news/boris-johnson-won-t-rule-out-suspending-parliament-3v2mcjbcz)
that Johnson had privately indicated he would leave the option
open.
Which stocks are active?
Oil producers rallied
(https://www.reuters.com/article/us-global-oil/oil-surges-after-report-of-tanker-incident-in-gulf-of-oman-near-iran-idUSKCN1TE05D?il=0)
on news that two oil tankers were damaged near the Strait of
Hormuz, according to the U.S. Navy, by what they called a "reported
attack". The crews have been evacuated but no casualties have been
reported. The incident follows the sabotage of four ships in May,
which the U.S. suspected was the result of Iranian activity. Total
SA (FP.FR) shares rose 0.5%, while Royal Dutch Shell PLC Class A
(RDSA.LN) were up 0.3%.
The results of Germany's hotly contested 5G spectrum auction
came in higher than expected at EUR6.6 billion raised
(https://www.ft.com/content/c6a6a47c-8d44-11e9-a1c1-51bf8f989972).
Successful bidders' shares traded higher Thursday. 1&1
Drillisch AG (DRI.XE) surged 8.1%. Telefónica Deutschland Holding
AG (O2D.XE) climbed 4.1%. Vodafone Group PLC (VOD.LN) was 1.4%
higher. Deutsche Telekom AG (DTE.XE) edged up 0.5%.
(END) Dow Jones Newswires
June 13, 2019 06:54 ET (10:54 GMT)
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