European shares rise on oil gains, French utility plays
Reuters
Published Aug 31, 2020 03:33AM ET
Updated Aug 31, 2020 04:45AM ET
By Ambar Warrick
(Reuters) - European shares rose on Monday as heavyweight oil and gas players were supported by higher crude prices and merger talks in major French utilities saw the sector outperform regional peers.
The pan-European STOXX 600 index (STOXX) rose 0.5%, adding to mild gains from the prior week amid some optimism over COVID-19 treatments. A British market holiday seemed likely to keep trading volumes subdued for the day.
The STOXX 600 was set to add nearly 4% for August. Still, it remains way off pre-pandemic highs as middling economic data and a resurgence in COVID-19 cases put the index in a roughly 30-point trading range since June.Suez (PA:SEVI) topped the STOXX 600 after larger peer Veolia (PA:VIE) offered to buy a 29.9% stake in the French water and waste firm from gas and power utility Engie (PA:ENGIE) for 2.9 billion euros.
Suez jumped nearly 20% and was set for its best day ever, while Veolia and Engie added about 3.6% and 6%, respectively. Their gains spurred a more than 1% rise in the European utility sector (SX6P), which outpaced its regional peers.
Oil and gas stocks (SXEP) rose more than 1% as hopes of more global stimulus measures and a recovery in Chinese demand propped up crude prices. [O/R]
Activity in China's services sector expanded at a much faster pace in August, official data showed, as demand across the economy continues to recover from a coronavirus-induced slump.
China-sensitive sectors such as automobiles (SXAP) and resource miners (SXPP) also rose. Both sectors depend on the country for their supply chains and is a major market as well.
Hopes of more accommodative measures by major central banks, in line with the U.S. Federal Reserve's stance last week, also supported the outlook for equities.
"We see the move in Fed policy as confirming an important shift that could also put pressure on other central banks — such as the European Central Bank — to tolerate higher levels of inflation," Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a note.
German stocks (GDAXI) rose about 0.6%, ahead of preliminary inflation data for August, due later in the day. Inflation readings for the EU bloc are also due later in the week, and are expected to be far below the ECB's target rate.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.