Brent Crude Hits 11-Year Low, Spain Hit by Election Results

Lucy Stoeva
21 Dec, 2015
New York City

European markets advanced and Brent oil dropped to an 11-year low. Markets were under pressure after ruling party failed to garner election win as expected. TeliaSonera agreed to sell its 60.4% stake in the Nepal-based Ncell to Axiata for $1.03 billion.

[R]4:00 PM Frankfurt – European markets advanced and Brent oil dropped to an 11-year low. Markets were under pressure after ruling party failed to garner election win as expected. TeliaSonera agreed to sell its 60.4% stake in the Nepal-based Ncell to Axiata for $1.03 billion.[/R]

European shares broadly advanced despite the disappointing election results in Spain and the ongoing decline in oil prices.

Volkswagen, Ericsson, and ITV led the markets in positive territory. Trading volumes remained predictably low in the holiday-shortened week.

In Spain, elections added to the overall uncertainty as results were inconclusive and none of the major parties won a clear mandate.

The Spanish IBEX 35 index fell 2.6% to 9.454, while the yields on the 10-year government bond jumped 9 basis points to 1.775% after the election results.

Brent crude oil price hit an 11-year low on Monday due to sharp increases in global supply. Russia has increased its daily production to 10 million barrels a day and OPEC member nations agreed to hold daily production target of 31.7 million barrels a day.

In addition, Iran is set to add at least one million barrel a day production in the export market and Libya is heading for higher production after the latest peace deal.

Moreover, shale energy producers in the U.S. are still holding on to production levels despite the near 45% decline in oil prices.

Brent futures for immediate month delivery plunged 1.9% to $36.18 per barrel, the lowest level since 2004.

In London trading, FTSE 100 index increased 53.07 or 0.9% to 6,105.48 and in Frankfurt the DAX index rose 93.67 or 0.9% to 10,702.04.

In Paris, CAC 40 index gained 20.66 or 0.4% to 4,646.05.

Caledonia Investments Plc fell 0.3% to 2,362 pence after the U.K.-based investment company said it has completed the acquisition of Gala Bingo Holdings Ltd, the largest retail bingo operator from Gala Coral Group Ltd for about £241 million.

John Wood Group Plc increased 1.3% to 594.50 pence after the U.K.-based energy services provider agreed to acquire the U.S.-based privately held Kelchner Inc., a provider of construction and energy field services for undisclosed financial terms.

In fiscal 2014, Kelchner generated sales of approximately $93 million.

TeliaSonera AB gained 1% to 42.21 Swedish kronor after the Sweden-based communication services agreed to sell its 60.4% stake in the Nepalese operator Ncell to Axiata, one of Asia’s largest telecommunication groups for about $1.03 billion in a cash and debt free transaction.

As part of the transaction, Visor will also sell its 19.6% stake in Ncell to Axiata.

The transaction is expected to close in the first-half of 2016.