Europe markets rise as energy firms gain on soaring oil price

Global stock markets edged higher yesterday as dealers tracked soaring oil prices, trade worries and corporate newsflow on the eve of the Federal Reserve’s interest rate call.
Wall Street along with Frankfurt and Paris in Europe posted meagre gains, with London climbed nearly 0.7% to 7,507.56 points thanks to strong gains by energy shares.
Asian bourses mostly rose in muted deals with Hong Kong and Seoul remaining shut for public holidays.
“Investors continue to keep a weather eye on the trade war situation,” said IG analyst Chris Beauchamp.
“But even without any further meaningful headlines on this front the upcoming Fed meeting ... means that most are content to await developments rather than rushing in to try and join in the general bounce in equities seen over the past week.”
Brent oil rebounded close to a four-year peak above $82 per barrel, on worries over stretched global supplies due to US sanctions on Iran.
“Brent crude hit a level not seen since late 2014, and that underlines how bullish the sentiment is,” said market analyst David Madden at CMC markets UK.
Energy firms enjoyed big gains on this week’s surge in oil prices, after the world’s top producers agreed to maintain output despite pressure from US President Donald Trump.
Higher oil prices translate into bumper profits and revenues for European oil giants like BP, Royal Dutch Shell and Total.
Shares in BP climbed nearly 3%, while those in Shell rose 2.4% in London. In Paris, shares in Total added 1.3%.
Investors remain cautious after the latest tit-for-tat tariffs in the US-China trade row.
While the levies had been widely expected, there are concerns about how long the dispute will last after China cancelled planned talks and said negotiations “cannot be carried out under the threat of tariffs”.
Vice commerce minister Wang Shouwen said yesterday it was impossible to negotiate while Washington is imposing tariffs that are like “holding a knife to someone’s throat”. He accused the US of abandoning a consensus struck in May.
In London, shares in clothing retail chain Next soared almost 10%, despite a warning over the risks of port delays and increased tariffs from a possible no-deal Brexit. They closed with a gain of 7.8%.
The group also insisted that the direct risks of a no-deal scenario did not “post a material threat to the ongoing operations and profitability of Next’s business”.
Investors focused on positive news that Next upped its full-year profits outlook after a bright first half.