Stocks

European shares flat as investors assess Saudi Arabia attack impact

Reuters September 17 | Updated on September 17, 2019 Published on September 17, 2019

Trading in Europe's main indexes was light after starting the week on a sluggish note. File Photo   -  Bloomberg

Defensive sectors gain on STOXX 600

European shares steadied on Tuesday as investors sought refuge in oil stocks and defensive sectors after attacks on Saudi Arabian oil facilities over the weekend heightened political tensions.

Trading in Europe's main indexes was light after starting the week on a sluggish note following the attacks. Investors were also on the fence ahead of a US Federal Reserve policy meeting, where it is expected to cut interest rates for the second time this year. “Markets definitely have calmed down from yesterday's shock and will now focus on central banks again and await decisions there,” said Teeuwe Mevissen, senior market economist at Rabobank.

Central banks of the world are expected to roll out stimulus measures to prop up slowing economic growth. Last week, the European Central Bank cut rates deeper into negative territory and relaunched bond purchases with no scheduled end-date.

The European healthcare, utilities, real estate and food and beverage indexes - commonly considered the defensive sectors - posted some of the biggest gains on STOXX 600. The pan-European index was trading flat at 0845 GMT after scaling six-week highs last week. The index has gained 15 per cent so far this year.

Oil and gas stocks retreated from Monday's gains as crude prices pulled back after the United States hinted at the possible release of crude reserves.

Shares in Zalando fell 10 per cent after a share placement by top investor Kinnevik in the e-commerce retailer. The broader retail index fell 0.3 per cent. Among other stocks, Husqvarna fell 6.5 per cent after the Garden equipment maker set new financial goals starting from 2020.

British clothing retailer French Connection slid 12.6 per cent after its said it expects sale process to be concluded by the end of the year, and reported a smaller first-half operating loss on growth in its wholesale business in the United States.

Investors were also looking to ZEW economic sentiment surveys from Germany, due at 0900 GMT. The data will provide a clearer view of the economic impact of a prolonged trade dispute between China and the United States.

Published on September 17, 2019
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