Europe Weakens; Weighed by Losses in Oil Sector
By Administrator_India
European stock markets sold off Tuesday, weighed by losses in the energy sector as investors react to the price of oil turning negative overnight.
At 4:25 AM ET (0825 GMT), the U.K.’s FTSE index traded 1.5% lower, France’s CAC 40 was down 2.1%, while the DAX fell 2.2%. The broader based Stoxx 600 Europe index dropped 1.4%.
The price of a barrel of West Texas Intermediate crude to be delivered in May closed at negative $37.63 on Monday, the penultimate day of trading for that contract, as investors and traders desperately sought to avoid delivery given a shortage of storage space for the current glut.
Although the equivalent Brent contract remained trading in the $20s per barrel, this was a graphic illustration of the imbalance in the crude market, with demand down around 30% as the global economy stalls.
The share prices of oil giants BP , Shell , ENI , Repsol and Total SA all fell between 4% and 5%, while the Euro Stoxx oil & gas subsector fell 4.1%.
At 4:25 AM ET, U.S. crude June futures, the more active month, traded 3.4% lower at $19.73 a barrel. The international benchmark Brent contract fell 13.2% to $22.20.
Elsewhere, shares in Primark owner Associated British Foods fell 4.5% after it said it would not pay an interim dividend and could not provide a full-year earnings forecast.
On the flip side, shares in the London Stock Exchange climbed over 3% as coronavirus-related volatility in markets lifted first-quarter income.
The main economic release in Europe Tuesday will be the German ZEW sentiment survey, due at 5 AM ET.
“Being one of the first indicators to show how we have started Q2, the question is not if it is bad but rather how bad,” said analysts at Danske Bank, in a research note.
Elsewhere, gold futures rose 0.3% to $1,715.75/oz, while EUR/USD traded at 1.0833, down 0.3% on the day.
