Europe open: Stocks drift lower as oil remains in focus
European stocks drifted a touch lower in early trade despite a strong showing in Asia and rallying oil prices.
At 0850 GMT, the benchmark Stoxx Europe 600 index was flat, Germany’s DAX was 0.2% lower and France’s CAC 40 was 0.1% weaker.
Meanwhile, oil prices continued to push higher after members of the Organization of the Petroleum Exporting Countries agreed on Wednesday to reduce production by 1.2m barrels a day to 32.5m barrels from January next year.
West Texas Intermediate was up 0.5% to $49.69 a barrel and Brent crude was up 8.8% to $50.47.
Markus Huber, a trader at City of London Markets, said: “European shares are trading moderately lower this morning despite higher markets across the board in Asia and slightly better than expected manufacturing PMI data out of China overnight.
“While tomorrow's US job data seem to be a bit less important for markets than usual all eyes are still on the Italian referendum taking place on Sunday. For many the Fed hiking rates in December is a done deal therefore it would take a horrendous set of US nonfarm payrolls data in order for the Fed not do anything this time around. In regard to the Italian referendum nobody doubts that a ‘no' vote could result in a prolonged period of uncertainty not only for Italy but for the entire eurozone, however this doesn't necessarily mean that markets will automatically take a dive.”
China’s official manufacturing purchasing managers' index released earlier came in at 51.7 for November, up from 51.2 in October and ahead of expectations for a reading of 51.0.
On the corporate front, oil giants BP and Shell racked up healthy gains as oil prices rallied. BP was also boosted by an upgrade to ‘outperform’ from ‘neutral’ from Credit Suisse.
Anglo-Swiss miner Glencore was on the front foot after it said its plan to reduce debt as resources prices retreat is near completion, and the company intends to return $1bn to its shareholders next year.
Rio Tinto pushed higher as it confirmed that it is cooperating with inquiries from the relevant authorities relating to the impairment included in the company's 2012 accounts in respect of Rio Tinto Coal Mozambique.
The statement followed a press report in earlier in the week stating that the company was facing an investigation by the US Securities & Exchange Commission on the timing of the $3bn in impairment charges.
Swedish medical equipment firm Elekta slumped after its results missed expectations.
TalkTalk was also under the cosh after a downgrade by JP Morgan Cazenove.
Daily Mail & General Trust was in the black as it reported a drop in adjusted pre-tax profit and operating profit but a rise in revenue for the year, with results ahead of expectations overall.
Still to come on the data calendar, eurozone manufacturing PMI is at 0900 GMT while the unemployment rate for the area is at 1000 GMT.