Tullow jumps as surge in oil price lifts explorers
German blue chips come within striking distance of their all-time highs
Traders in New York. New economic data showed the domestic US economy grew at a faster pace in the fourth quarter than previously estimated
Irish shares and the broader European market advanced on Thursday, with Tullow Oil and other explorers standing out as a strong spot as US crude oil prices surged above $50 a barrel for the first time in three weeks.
The Iseq index ended the session up 0.6 per cent at 6,616,98, while the pan-European Stoxx 600 index advanced by 0.5 per cent to 380.46.
Tullow is looking to raise the equivalent of €709 million through a share sale which it plans to complete early next month.
Oil exploration small-caps Providence Resources and Aminex rose by 9.5 per cent to 23 cent and 6.9 per cent to 6.2 cent respectively.
Smurfit Kappa was also in demand as Davy analysts upgraded their earnings forecasts for the company and other European paper packaging groups.
“The European packaging sector has not experienced such a confluence of positive factors for some times. Improving domestic and export demand, limited new capacity (for now), falling (US) imports and rising raw material costs combined to provide a very positive backdrop for corrugated and containerboard pricing,” Davy said.
CRH was also in demand, rising 1.3 per cent to €32.82, on growing hopes that the new US administration would unveil its $1 trillion infrastructure plan by the end of this year.
However, the mining sector – boosted by strong metals prices – provided support. Glencore, Rio Tinto and Anglo American gained between 1 per cent and 2.3 per cent.
Shares in SSE, owner of Airticity, shares fell 1.5 per cent after the energy supplier said dividend cover for its 2017-2018 financial year would be at the lower end of guidance.
The London Stock Exchange, fresh from disappointment over a planned merger with Deutsche Boerse being scuppered by the EU antitrust regulator, was up 0.8 per cent.
Among other gainers, Ashtead rose 2.4 per cent after brokerage Liberum initiated coverage of the construction equipment rental company with a “buy” rating.
Traders said investors were growing confident about prospects for the region’s stocks as the economy improves, offsetting political jitters ahead of elections in France and Germany, and Britain’s divorce from the EU.
European shares have risen more than 18 per cent since the lows hit in June last year in a rally that has been supported by improving economic data, brighter earnings and expectations of a big fiscal stimulus in the United States.
Gains among industrial stocks also provided support with Germany’s Siemens, which gained 1.5 per cent, while France’s Saint Gobain and Schneider Electric traded up 2.1 per cent and 1.1 per cent respectively.
Among the fallers was H&M, which fell more than 4 per cent, close to four-years lows.The retailer posted a smaller-than-expected fall in pre-tax profit for the first quarter but analysts voiced concerns over its rising inventory levels, as well as a revolving credit facility.
Economic data earlier in the day showed that the domestic economy grew at a faster pace in the fourth quarter than previously estimated. Gross domestic product increased 2.1 per cent, compared with the previously reported 1.9 per cent.
Among individual stocks, Lululemon Athletica plunged as much as 23.4 per cent to a more than one-year low after the Canadian yoga and leisure apparel retailer said first-quarter comparable sales were expected to fall.
ConocoPhillips rose 7.2 per cent after the company said it agreed to sell oil sands and western Canadian natural gas assets to Cenovus Energy. Cenovus was down 12.2 per cent.