Shares hit high as rising oil prices jump-start energy stocks

European shares hit a three-week high on Wednesday, ending the month in positive territory, with energy stocks racing higher as oil prices jumped after a deal to curb global oversupply. Oil prices rose more than 8 per cent as some of the world’s largest oil producers agreed to curb oil output for the first time since 2008 in a bid to support prices.

Dublin

The Iseq finished flat, as gains for a number of major stocks was offset by a 3 per cent dip for

Ryanair

, which closed down at €13.70 as oil prices surged. Building materials group

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CRH

, the biggest stock on the Dublin market, rose 1.1 per cent to €31.50, while there were also gains for food group

Glanbia

and insulation maker

Kingspan

.

Independent News & Media, which dropped 2.7 per cent on Tuesday after it confirmed there had been a dispute between its chairman and chief executive, rebounded 4.6 per cent to finish 11.5 cent on a day of high trading volumes in the stock. Hedge fund Farringdon Capital Management raised its stake above 5 per cent, prompting a notification to the Irish Stock Exchange.

Paper and packaging group Smurfit Kappa, which was confirmed as a new entry to the FTSE 100 from next month, rose 1.6 per cent in Dublin to €21.60.

Dalata Hotels Group fell 2.1 per cent to €4.40, while Paddy Power Betfair slid 2.3 per cent to €98.50.

London

The FTSE 100 index rose 0.2 per cent, led by rebounding energy stocks after oil prices surged to their biggest one-day gain in nine months.

FTSE's oil and gas index rose 4.1 per cent. Royal Dutch Shell and BP were the FTSE 100's biggest gainers, rising 4 per cent and 3.8 per cent respectively. Energy stocks on the mid-cap FTSE 250 rose even faster, with Tullow Oil and Cairn Energy up around 14 per cent.

Conversely, the prospect of higher fuel bills pushed EasyJet and International Consolidated Airlines Group down 2.1 per cent and 2.5 per cent.

Royal Bank of Scotland lost 1.4 per cent after it failed a stress test by the Bank of England, meaning it will have to bolster its capital buffer to address a shortfall of some £2 billion.

The FTSE 100 fell 2.5 per cent over the month of November, snapping a five-month winning run. The index has underperformed European peers this month, as it contains many defensive stocks that have lagged as investors have bet on a return of inflation and growth following the election of Donald Trump as US president.

Europe

Energy companies helped the pan-European Stoxx 600 rise 0.3 per cent. The index rose as much as 0.7 per cent to its highest since November 10th when global markets were boosted by optimism over freshly elected US president’s Donald Trump’s fiscal stimulus plans.

The Italian bank index surged for a second day, up 3 per cent, after touching a two-month low as some investors said the sell-off seen in the run-up to the vote that could unseat prime minister Matteo Renzi might be overdone. The bank rally helped Milan's blue chip index, the worst performer among major European bourses this year, end up 2.2 per cent.

The broader European equities market was underpinned by some mergers and acquisitions news. Linde shares advanced 4.7 per cent after the German industrial gases group received a fresh approach from US rival Praxair for a merger of equals.

US

Gains in energy and bank stocks lifted the Dow Jones and the S&P 500 to record intraday highs on Wednesday, but losses in technology stocks dragged down the Nasdaq, with

Apple

and

Amazon.com

both declining in early trading.

GoPro rose 3.3 per cent after the wearable camera-maker said it would cut 15 per cent of its workforce and shut its entertainment business.

Teen clothing retailer American Eagle Outfitters dropped 13.5 per cent to $16.35 after providing a disappointing profit forecast for the crucial holiday quarter.

Meanwhile, the dollar strengthened against all other major currencies, except for Mexican peso, Norwegian krone and Brazilian real. US government bonds fell, pushing the yield on 10-year Treasuries up 10 basis points to 2.38 per cent.

– (Additional reporting: Reuters)