Europe: Shares end higher as tech, retail lead rebound; energy shares dip

EUROPEAN shares ended higher on Monday, clawing back some losses following a dismal start to the year with technology and retail stocks leading gains, while energy shares languished following a drop in crude oil prices.

The pan-European Stoxx 600 closed 0.3 per cent higher after falling as much as 0.7 per cent during the day.

Amongst the top gainers, technology added 1.2 per cent, snapping a six-day losing streak, while the retail index also gained 1.2 per cent, logging its first gain in seven sessions.

“Stocks had declined in the first week of the year ... the most plausible reason (was) because they’ve gone up a lot (in the last year) and some profit taking was the concrete reason,” said Chris Beauchamp, chief market analyst at online trading platform IG.

“Now that has abated to an extent, it’s giving us some scope for recovery after what has been a miserable start of the year.”

The European benchmark logged its first weekly decline in eight last week after a stellar rally in the latter half of 2023 amid growing hopes that major central banks could consider interest rate cuts in 2024.

However, a recent string of mixed economic data across the world has pushed markets to scale back their expectations for future policy rate cuts.

On the downside, oil and gas stocks dropped 2.6 per cent on Monday as crude prices declined over 3 per cent following sharp price cuts by top exporter Saudi Arabia and a rise in Opec output.

Shell lost 3.1 per cent after the oil giant flagged an impairment charge of up to US$4.5 billion for the fourth quarter.

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Focus would now shift to the US quarterly earnings season set to kick off this week, while a key inflation report due on Thursday will help set the tone for equity markets around the world.

On Monday’s data front, German industrial orders rose less than expected in November, while a separate reading showed investor morale in the euro zone improved for the third consecutive month in January, to its highest level since May.

In corporate news, Airbus gained 2.5 per cent after the US FAA ordered the temporary grounding of some of rival Boeing’s 737 MAX 9 jets. US-listed shares of Boeing dropped 6.8 per cent in US trading.

Drax rose 9.5 per cent to the top of the Stoxx 600 after a report stated the British power generator won approval for a multi-billion-pound carbon dioxide capture scheme.

Shipping companies Hapag-Lloyd and Maersk denied a report saying that some shippers had started to make agreements with Iranian-backed Houthi militants to prevent their ships from being attacked in the Red Sea. Their shares were down 10.2 per cent and 5.7 per cent, respectively. REUTERS