European shares rise as oil declines
The pan-European Stoxx 600 gained 0.44% to 598.47
European shares moved higher on Monday as oil prices pared earlier gains after reports that crude loading operations had resumed at the United Arab Emirates’ port of Fujairah following a drone attack that had briefly disrupted exports.
The pan-European Stoxx 600 gained 0.44% to 598.47.
Germany’s DAX added 0.5% to 23,564.01, France’s CAC 40 rose 0.31% to 7,935.97, and London’s FTSE 100 advanced 0.55% to 10,317.69.
Earlier today it looked like we were poised for a fresh outbreak of risk aversion as Brent pushed through the magic $100 level, noted Chris Beauchamp, chief market analyst at IG.
Stock markets stand or fall by the oil price at present, and in the topsy-turvy world created by the war against Iran, the absence of bad news, and hopes that the war will last week’s rather than months, is enough to prompt a recovery in equities, he added.
Energy markets remained central to investor sentiment amid ongoing tensions linked to the war involving Iran and U.S.
Brent crude futures were last down 1.2% on ICE at $101.90 a barrel.
Beauchamp noted that just as equity traders find themselves trading and watching oil, commodities traders are now transfixed by the movements of individual ships through Hormuz, adding that a second week where oil fails to hold above $100 might start to suggest that investors are still happy to sell the rallies in Brent and WTI on the basis that the US will take steps to prevent Iran closing the strait on a permanent basis.
Geopolitical risks still continued to dominate the outlook for energy markets across the world.
Investors were also preparing for a busy week of monetary policy decisions from some central banks.
Danni Hewson, head of financial analysis at AJ Bell, said investors would now be focused on how policymakers respond to the renewed energy shock.
She added: What investors will be keen to discover is how central banks are factoring in the anticipated rekindling of inflation and whether they see a swift resolution setting rates back on the path downwards, or if the impact of the past couple of weeks takes cuts off the table for the rest of the year.