European Markets Trade Sideways as Volatile Oil Closes Up

Lucy Stoeva
09 May, 2016
New York City

European markets closed mixed on Monday, tracking the movement in volatile oil prices and reflecting the weak international data from China. Alstria Office REIT said funds from operations grew 24.5% in the first-quarter of 2016. ITE Group

[R]4:00 PM Frankfurt, Germany – European markets closed mixed on Monday, tracking the movement in volatile oil prices and reflecting the weak international data from China. Alstria Office REIT said funds from operations grew 24.5% in the first-quarter of 2016. ITE Group’s founder Mark Shashoua is returning to the company as CEO.[/R]

European stock markets pared earlier gains and closed mixed on Monday, tracking the movement in volatile oil prices and reflecting on the weaker international trade data from China.

In morning trading, a rally in oil prices pushed stock markets higher, but a reversal in the trend dampened the positive sentiment.

By the late afternoon, Brent crude oil fell 3.4% to $43.84 per barrel, while WTI crude oil futures dropped 2.5% to $43.56 per barrel.

The volatility in oil prices was fueled by Canadian wildfires and by the dismissal of long time oil minister Ali al-Naimi in Saudi Arabia.

Saudi Arabia announced several measures to deal with falling oil prices and changes key ministers and halted several infrastructure projects and trimmed government spending.

Among oil shares, Tullow Oil tumbled 5.4%, Seadrill plunged 6.4%, Repsol fell 3% and BP erased 2.6%.

Exports unexpectedly declined 1.8% in April from the previous year, compared to an increase of 11.5% in March, the Chinese General Administration of Customs said.

China''s trade surplus widened to $45.56 billion in April from $29.86 billion in March as imports fell by 10.9% from the previous year earlier.

The slowdown in Chinese exports directly affected shares of mining companies since China is the largest importer of industrial metals.

Anglo American stock plummeted 13.9%, Glencore lost 9%, Rio Tinto closed down 7.9%, BHP Billiton fell 6%, and Antofagasta shed 5.6%.

In London, the FTSE 100, heavily weighted with resource and energy stock, underperformed other leading European indexes. The index lost 10.89 or 0.2%, to 6,114.81.

In Greece, the parliament took the unpopular move to overhaul pensions and increase taxes, hoping to unlock bailout funds.

The finance ministers of the euro zone are meeting in Brussels on Monday to discuss Greece’s debt and its bailout program.

The Athens Composite Index gained 0.74% to 610.07.

In Frankfurt, the DAX index added 110.54, or 1.12%, to 9,980.49, while in Paris, the CAC 40 index rose 21.57, or 0.5%, to 4,322.81.

Alstria Office REIT-AG advanced 0.7% to €12.32 after the German real estate company said revenues increased 1.6% from a year ago to €51.1 million in the first-quarter of 2016.

Funds from operations were €29 million, up 24.8% from the same period a year ago, due to lower vacancies and lower administration and personnel expenses.

The company confirmed its 2016 revenues guidance of €200 million and funds from operations of €115 million.

Electricite de France SA fell 1.8% to €11.47 ahead of its earnings report. The French utility company is scheduled to report first-quarter results tomorrow.

ITE Group Plc lost 0.7% to 148 pence, despite reporting revenues of £63.6 million for the first-half of fiscal 2016, representing an increase of 13% over the same period last year.

The trade event company also announced that the current CEO of i2i Events Group, Mark Shashoua, will return as a CEO to ITE Group. Mike Shashoua was among the original founders of company in the early 1990s.

ITE generates about 50% of its revenues in oil-dependent economies and acknowledged that the trading environment was difficult.

In Kazakhstan, comparable volume sales fell 10% year-on-year, while in Azerbaijan sales were 22% lower in terms of volume.