Europe: Oil stocks buoy European shares as US pulls out of Iran deal

[MILAN] European shares were supported on Wednesday by strength in oil stocks after US President Donald Trump pulled the United States out of Iran's nuclear agreement, boosting crude prices.

While some solid earnings updates also provided support, shares in companies with exposure to Iran fell, with plane maker Airbus and car makers Renault and PSA trading down between 0.4 and 1.7 per cent.

By 0727 GMT, the pan-European STOXX 600 had risen nearly 0.2 per cent, while higher crude prices helped the commodity-stocks-heavy FTSE index gain 0.4 per cent.

Oil and gas was the biggest sectoral gainer, with its index up 1.5 per cent at a three-year high as crude rallied after Mr Trump's move on Iran raised the risk of conflict in the Middle East and cast uncertainty over global oil supplies.

Shares in oil majors Total, Royal Dutch Shell and Eni were all trading up between 0.9 and 2 per cent.

But higher oil prices weighed on travel stocks like airlines, whose sector index was also hit by a drop in Europe's largest travel and tourism group TUI Group, as its earnings update failed to inspire.

REUTERS