Europe open: Shares dip amid jump in crude oil futures as traders assess new reality
Shares on the Continent are moving lower, despite sharp gains among companies in the oil patch, as investors mull the potential fallout from Washington's decision on Monday not to extend waivers from sanctions for a raft of countries who import oil from Iran.
Faurecia
€21.27
16:30 24/04/24
Koninklijke Ahold
€0.00
08:15 09/09/22
Wirecard AG
€0.00
07:46 20/03/24
Xetra DAX
17,917.28
18:59 25/04/24
On Monday, US Secretary of State Mike Pompeo announced the Trump administration's decision to push Tehran's oil exports to zero, although some reports were indicating that Beijing and New Delhi were still trying to negotiate extensions to their waivers.
"The US removal of waivers is just one of a string of recent supply concerns hitting the oil market. Adding to strains, Iran has threatened to close the Strait of Hormuz - a key gateway for Middle East oil to the rest of the world," said analysts at Danske Bank.
"Risk sentiment has held up reasonably well so far in the wake of the sustained oil uptick, with major equity indices little changed over the Easter period."
As of 0843 BST, the benchmark Stoxx 600 was dipping 0.21% to 389.63, while the German Dax was drifting down by 0.04% to 12,217.44 and Spain's Ibex 35 was off by 0.29% to 9,554.40.
Oil&Gas was pacing gains, with the Stoxx 600 sector gauge adding 1.71%; according to analysts at Barclays Research, recent developments implied "material" upside to their forecast for Brent to average $70 a barrel in 2019, but not on longer time frames.
However, Barclays now saw an increased risk of a potential conflict in the Middle East.
Going the other way, companies in the Basic Resources space were lower by 0.15% after a statement from China's Politburo, on Friday, was interpreted as signaling less need for sustained policy stimulus.
Politics was also in focus after Ukrainian comedian Volodymyr Zelensky made off with over 73% of the ballots cast in a run-off election against incumbent Petro Poroshenko.
Investors were also keeping a nervous eye on Westminster amid expectations for talks between the government and Labour to restart following the Easter break, even as Tory backbenchers were said to be mulling changes in their own party's rules that would allow them to oust the Prime Minister.
The sole economic indicator due out on Tuesday on the Continent was a preliminary reading on the European Commission's consumer confidence index for April.
For later in the session, data on US new home sales was scheduled for release at 1500 BST.
Dutch grocer Ahold was under the cosh after announcing to shareholders that the strike at over half of its US Stop&Shop stores in mid-April would wipe off between $90-$110m from its underlying operating profits.
Wirecard AG was off earlier lows after the ban on short-selling the company's shares expired.
French auto parts maker Faurecia reiterated its forecasts for sales to grow faster than the rest of the market in 2019.
Novartis was little changed even after indicating that the death of a baby might be tied to one of its clinical trials for its gene therapy Zolgensma.