Europe open: Shares lower as investors eye OPEC meeting, Brexit talks
European shares opened lower on Monday as investors fretted about continuing Covid-19 outbreaks, weaker oil prices ahead of a meeting of oil producers and Brexit trade talks.
The pan- European Stoxx 600 index was off 0.13%. The UK FTSE 100 and German Dax had both shrugged off earlier losses to move ahead in early trade, with gains of 0.35% and 0.05% respectively.
Despite the fall the Stoxx was still on track for its best month on record, driven by hopes for a Covid-19 vaccine.
Investors were watching a meeting of the Opec+ group of oil producers, set to make a decision on January production plans. An informal online meeting of the oil producers reportedly failed to agree cuts, with Russia and others keen to maintain current output plans. Shares in oil majors Shell and BP were both down on the news.
“Crude markets are nervy ahead of the two-day OPEC+ meeting kicking off in Vienna today. Futures traded lower after an informal meeting on Sunday failed to reach agreement ahead of the main ministerial event,” said Markets.com analyst Neil Wilson.
“If there is no agreement to extend the current level of production cuts, an extra 2m barrels per day will come on stream in January. Whilst there seems to be broad agreement on extending current level of cuts for some time beyond the start of the year, the United Arab Emirates and Kazakhstan are thought to be dissenting.”
Brexit talks were in focus, with UK Prime Minister Boris Johnson and EU Commission president Ursula von der Leyen set to talk via phone on Monday.
There was also well received data from China overnight as the manufacturing PMI reading increased from 51.4 in October to 52.1 in November – the fastest of rate of expansion in three years.
The services PMI reading was 56.4, and that exceeded the 56 consensus estimate, and it was the largest level of growth since 2012.
In equity news, JD Sports shares rose more than 7% after the company was reported to be considering scrapping plans to buy Debenhams.
Media reports said JD's decision on whether to proceed with a purchase of Debenhams stores and its online business was "on a knife edge". The imminent bankruptcy of Philip Green's Arcadia business was said to have contributed to JD's nervousness.
Shares in ABN AMRO Bank fell after the company said it was cutting staff by around 15% by 2024 under a new cost cutting plan reflecting the current economic outlook.
The bank said costs would not exceed €4.7bn in 2024, reflecting savings of €700m, adding that it was targeting a return on equity for the same year of around 8%.