Europe midday: Oil cuts weigh, while Viaplay shares crash by 60%

European shares were drifting on Monday as investors eyed the impact of rising oil prices after major producer Saudi Arabia said it would cut output, while shares in Viaplay crashed amid the departure of its CEO and outlook downgrade.

The pan-regional Stoxx 600 was up 0.05%, with most bourses higher, bar France’s CAC 40, which was down 0.15%. Britain’s mining-heavy FTSE 100 outperformed with a 0.51% rise.

Asian shares were higher, lifted by Friday's rally on the back of US payrolls data and a pickup in China's services activity in May.

Brent crude traded just below $77 a barrel. Saudi Arabia said it would cut production by a million barrels a day in July, while members of the OPEC+ cartel of oil states pledged to lower targets again next year.

“Oil prices are trapped in conflicting tides between production cuts on one hand, and concerns about demand as China’s recovery slows, while a recession in the US looms,” said Hargreaves Lansdown analyst Susannah Streeter.

“So, for now, this production cut is unlikely to show up in a dramatic way at the pumps.”

On the economic front, Eurozone sentiment deteriorated in June as worries about the German economy weighed, according to data released on Monday.

The Sentix investor sentiment index fell to -17.0 in June from -13.1 in May, hitting its lowest level since January and missing consensus expectations of -15.1.

Eurozone services activity fell in May, according to final survey readings released on Monday.

The final S&P Global composite purchasing managers’ Index (PMI) fell to 52.8 in May from April’s 54.1, above the 50 mark separating growth from contraction, but lower than a flash estimate of 53.3.

A PMI covering the services sector dropped to 55.1 from April’s one-year high of 56.2, below the 55.9 flash reading. Weaker-than-expected PMI readouts from Italy and Spain, combined with downward revisions to the French and German PMIs, pulled the overall number lower.

In equity news, shares in Viaplay crashed by 60% after the Swedish entertainment provider said CEO Anders Jensen had quit and the group downgraded its outlook for 2023.

Goldman Sachs Asset Management made a $600m bid for Norwegian aquaculture service group Froy, sending its shares higher by 4%. Novo Nordisk said it started talks to buy a controlling stake in French medical device designer Biocorp.

Elsewhere, UBS said it expected to complete its takeover of disgraced rival Credit Suisse "as early as June 12".

Reporting by Frank Prenesti for Sharecast.com