You are here
Europe: Shares end steady as oil stocks offset real estate rally
[LONDON] European equities steadied at the close on Monday, with stronger real estate and healthcare offsetting weaker energy stocks, which tracked a sharp drop in crude oil prices.
Roche rose 1.3 per cent, helping the European healthcare index to rise 1 per cent, after the drugmaker's cancer immunotherapy drug Atezolizumab was found to reduce tumours in two thirds of lung cancer patients when combined with chemotherapy.
The STOXX Europe 600 real estate index gained 1.3 per cent, with traders attributing the rise to a positive note by JP Morgan, raising its target price for stocks of companies including British Land, Great Portland and Land Securities. Their shares rose 0.8 to 1.6 per cent. "We ... maintain our preference for higher growth potential markets in the UK, Ireland and Spain," JP Morgan analysts said in the note, adding that they saw a 9.7 percent upside potential for the sector.
However, gains were eclipsed by losses in energy stocks after oil prices fell more than 1 percent on a strong dollar and worries of stubbornly high supplies as OPEC prepared to stick to production targets when they meet this week.
The European oil and gas index fell 0.8 per cent, while the regional basic resources index dropped 0.9 per cent following concerns about the metals demand in major consuming countries such as China.
The FTSEurofirst 300 index of top European shares ended 0.06 per cent higher at 1,587.29 points after moving in and out of negative territory earlier in the day. The index shed 2 per cent last week, but is still up about 16 per cent this year.
Investors kept a close eye on Greece, which missed a self-imposed Sunday deadline for reaching an agreement with its international lenders. Without a cash-for-reforms deal, Athens risks default or bankruptcy in weeks.
But some analysts remained optimistic. "We are hopeful that in the end there will be a deal. It may not be what either party really wants, but the only possibility is a compromise," Lorne Baring, managing director of B Capital Wealth Management, said. "We are seeing some fatigue, but still constructively bullish for equities." Among other movers, shares in Vestas Wind declined 4.8 per cent, the top faller on the FTSEurofirst 300, after Citigroup analysts downgraded the stock to "sell" from "hold". "Vestas' growth profile does not appear as compelling as the cap goods sector," the analysts wrote in a note.