European Markets Jump 2%; Lloyds, Seadrill and Technip Surge

Lucy Stoeva
25 Feb, 2016
New York City

European markets rebounded after positive news from key financial and energy companies overshadowed a selloff in China and a drop in oil prices. Technip increased its quarterly profit by 27%. Seadrill announced a refinancing plan. Lloyds will pay a special dividend.

[R]4:00 PM Frankfurt, Germany – European markets rebounded after positive news from key financial and energy companies overshadowed a selloff in China and a drop in oil prices. Technip increased its quarterly profit by 27%. Seadrill announced a refinancing plan. Lloyds will pay a special dividend.[/R]

European markets staged a rebound on Thursday after positive corporate news from key financial and energy companies overshadowed a sell-off in China and oil prices extended the recent decline.

In China, which will host the G-20 meeting this week, the Shanghai Composite sank 6.4% for the day.

Brent crude oil futures for immediate month delivery were down 0.7% to $34.17 a barrel, while West Texas Intermediate crude oil fell 1.2% to $31.75 a barrel in volatile trading.

Nevertheless, most oil companies recorded gains after French oil service provider Technip posted quarterly profit growth of 27%, while Norwegian rig company Seadrill announced a refinancing plan.

Shares of Technip jumped 11.4%, Seadrill surged 8.8%, Amec Foster Wheeler added 2.8%, and Petrofac climbed 4.5%.

In the financial sector, Lloyds Banking Group rallied 12% after the bank announced an additional dividend, despite a decline in annual net profit.

RSA Insurance Group jumped 10.1% on growing profits and targets, while French insurer AXA gained 0.9% after profits soared 12%.

In January, lending to companies in the euro zone increased 0.6% from a year ago, according to data from the European Central Bank.

On the negative side, Zodiac Aerospace plunged 25.3% on a profit warning.

In London, FTSE 100 index was up 146.69, 2.50%, to 6,013.87, while in Frankfurt, the DAX index gained 163.68, or 1.79%, to 9,331.48.

In Paris, the CAC 40 index advanced 93.11, or 2.24%, to 4,248.45.

The pound stabilized against the dollar after the sharp losses in the previous days on concerns that the U.K. may leave the European Union after the referendum in July.

AXA SA gained 0.9% to €19.67 after France’s largest insurer said 2015 profit soared 12% due to increasing sales in Europe and Asia.

Net income reached €5.62 billion from €5.02 billion a year earlier.

The insurer announced dividend of €1.10 per share, up 16% from the previous year.

Lloyds Banking Group Plc soared 12.9% to 70.25 pence after the bank announced a special dividend payment, despite a drop in profits.

Pre-tax profit fell 7% in 2015 to £1.6 billion from the previous year after the provisions for payment protection insurance, or PPI, reached £4 billion in 2015.

The bank also took a charge of £837 million related to complaints about packaged bank accounts and product rectifications in retail, insurance and commercial banking.

However, Lloyds announced a special dividend of 0.5 pence per share, on top of the ordinary dividend of 2.25 pence per share.

In Oslo, Seadrill rallied 8.8% to 15.4 Norwegian kroner after the rig company, which carries debt of $10.7 billion, said it would announce a funding plan later in the year.

Net income rose 82% to $285 million in the fourth quarter from the same period a year ago.

Seadrill also won a new contract in Angola, valued at $285 million, but reduced the backlog for the West Polaris rig by $95 million.

Cost savings were $832 million in 2015, above the target of about $600 million.

Technip jumped 11.4% to €42.73 after the French oil-service company posted a 27% increase in profit and the company warned 2016 revenues may decline.

Net profit in the December quarter increased to €102 million from €80.1 million in a year ago quarter, while revenue rose 11% to €3.12 billion.

Technip will propose an annual 2015 dividend of €2 per share.

Zodiac Aerospace plunged 25.3% to €14.51 after the French airplane seat manufacturer said its restructuring plan will take longer and profit margins will be lower than expected.