Mixed feelings | Calamatta Cuschieri

Asian markets got a boost of confidence over the OPEC output deal, bt the mood failed to spill onto European investors

Crude oil shot over $51 a barrel after it extended its winning streak by a further 4.55%
Crude oil shot over $51 a barrel after it extended its winning streak by a further 4.55%

Global markets struggled to find firm direction, and closed mixed during Thursday’s session. Asian markets were firmly higher as investor confidence was lifted over the OPEC output deal reached on Wednesday. Japan’s Nikkei 225 index logged its best finish of 2016, at 18,513.12.

Unfortunately, this mood failed to spill onto European investors, and European markets closed slightly lower, as rallying oil prices lifted the energy sector once again, but hindered consumer goods shares on the prospect of higher inflation.

Over on Wall Street, stocks also traded mixed during Thursday’s session, with the Dow creeping tepidly higher following upbeat manufacturing data and rising oil prices. However, the NASDAQ underperformed as the so-called Apple and FANG (Facebook, Amazon, Netflix and Google parent Alphabet) stocks all traded in the red.

OPEC boost

Prices of crude oil continued to soar on Thursday, in the wake of the Organisation of Petroleum Exporting Countries’ agreement to curb daily oil production by 1.2 million barrels on Wednesday. Crude oil shot over $51 a barrel after it extended its winning streak by a further 4.55%.

Oil producers were naturally in the green on this news. BP oil saw its shares jump 2.3% after a rating update to outperform from Credit Suisse. Shares of its competitor Royal Dutch Shell were also trading higher, as they rose 2.68%. Shares in these two energy majors represent a roughly 15% weighting on the FTSE 100.

Banks in focus

Shares of European banks finished November with gains, but investors could be in for a rough ride, as December gets under way, if proposed Italian government reforms are rejected by voters.

Investors continue to be concerned with political uncertainty in Italy ahead of a key referendum on Sunday and its implications on the banking system. The Italian central bank warned on Wednesday that the country's top three banks would need to hold further capital against their assets from 2018. 

The Stoxx Europe 600 bank index recorded a 4.1% rise in November, marking the gauge’s second consecutive month of gains. London-listed Barclays and Germany’s largest lender, Deutsche Bank, did much of the heavy lifting, as shares in each advanced 13%.

During Thursday’s session, Banco Popular Español shares soared as the Spanish lender called an extraordinary board meeting to replace long-time Chairman Angel Ron. Shares leapt 13.66%.

General motors up, guess down

General Motors’ shares surged to the highest level since December of last year, after the automaker said November US vehicle sales jumped 8% from a year ago, with all four brands showing growth.

But shares of Guess were in the red after the fashion retailer cut its earnings outlook for the year. Shares sank 10.22% on the news.

This article was issued by Rebecca Naudi, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investments Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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