European stocks waver as Spanish banks slide, oil stocks rise
European stock markets wobbled on Thursday, with Spanish banks under pressure as Banco Popular Español SA plunged, but energy shares got a boost as Brent crude recaptured the $50-a-barrel level.
The Stoxx Europe 600 index was off less than 1 point at 348.40. Oil and gas and basic materials shares were among the advancers, while financial and telecom shares pulled lower. On Wednesday, the pan-European benchmark leapt 1.3% to mark its highest close since April 28, according to FactSet data.
Sitting at the bottom of the index Thursday was Banco Popular Español as the bank’s stock tumbled 26%. The move came as the Spanish lender said it’s planning a 2.5 billion euros ($2.8 billion) share sale, an effort to ease investor concerns about the company’s capital ratio and batch of bad property loans.
Also in Madrid trade, shares of Banco de Sabadell SA dropped 6.2%, CaixaBank SA lost 3.8%, and Bankia SA moved down 3.9%. Banco Santander gave up 2.3%.
On a brighter news from the country, Spanish growth in gross domestic product was confirmed at 0.8% in the first quarter, and 3.4% year-over-year.
Oil boost: Energy stocks moved up alongside oil prices, as Brent crude traded above $50 a barrel for the first time since November. That gain came after U.S. data showed a larger-than-estimated decline in weekly oil stockpiles. West Texas Intermediate futures were approaching $50 a barrel.
Oil producer Tullow Oil PLC rose 2%, and France’s Total SA added 0.6%. Oilfield services firm Technip SA gained 1.4% but Subsea 7 SA fell 4.4%.
“Whether the bullish trend [for oil] still has legs or if an imminent correction is due remains a wild guess, as speculators over-exaggerate on the upside as they did recently on the downside,” said Hussein Sayed, FXTM’s chief market strategist, in a note.
“However, OPEC’s meeting on June 2 remains to be the key risk factor in the short term as markets are eager to know whether an agreement on a potential oil freeze will see the light,” said Sayed.
Indexes: Germany’s DAX 30 picked up 0.3% at 10,233, and France’s CAC 40 rose 0.1% to 4,484.35.
Italy’s FTSE MIB fell 0.5% to 18,108.45, while the U.K’s FTSE 100 edged up 1 point to 6,263.95.
“[D]espite a corrective move on the dollar and further gains on the oil price, there has been slight tempering of the risk appetite that has driven some strong moves on equities in recent days,” said Richard Perry, market analyst at Hantec Markets, in a note.
Movers: Daily Mail & General Trust PLC shares fell 7.7% after the publisher cut its operating-margin target for its DMG Media unit.
Source: MarketWatch
