Europe open: Energy shares pace the advance after OPEC deal
European stocks rose in early trade, with energy shares pacing the advance after OPEC ministers agreed a deal to cut production for the first time since 2008.
At 0900 BST, the benchmark Stoxx Europe 600 index was up 0.9%, Germany’s DAX was 1.1% higher and France’s CAC 40 was up 1.5%.
At the OPEC meeting in Algiers, ministers agreed to cut production to between 32.5m and 33m barrels a day, down from August output levels of 33.2m barrels, with further details of the agreement due to be discussed at the next meeting on 30 November.
Oil prices initially surged on the news, but by Thursday morning they were steady and it appeared some scepticism had begun to creep in about the deal.
West Texas Intermediate was flat at $47.03 a barrel and Brent crude was off 0.1% at $48.64.
Still, energy stocks powered ahead, with the Stoxx 600 oil and gas index up 4.4%.
Markus Huber, a trader at City of London Markets, said: “European shares are trading higher this morning on news that OPEC has agreed to cut oil production for the first time in almost a decade. While the actual amount being cut, 700,000 barrels a day isn't necessary huge, psychologically this appears to be a big deal with some possibly hoping for further cuts down the line.
“If in the end OPEC members actually stick to it is of course a different matter anyway and needs to be seen in the weeks and months to come. Besides quite a bit of second tier economic data scheduled to be released today focus will also be on Fed chief Yellen due to give a speech later tonight.”
In corporate news, Bankia gained ground on news the Spanish government is considering merging the bank with Banco Mare Nostrum.
Credit Suisse was also in the black amid reports the bank could settle a US investigation into its mortgage-bond dealings within weeks.
Tobacco maker Imperial Brands rose after saying it is on track to meet full year expectations at constant currency and exchange rates as it reported growth from its US acquisitions.
Outsourcer Capita tumbled after it warned that full-year profits will be some way short of current forecasts after its third quarter was hit by a slowdown in some areas, one off costs and recent hesitation among clients.
Leisure operator Merlin Entertainments pushed lower after it reported growth in revenue in the year to date but highlighted still-challenging trading.