Energy and other commodity-related sectors are leading European stocks higher on Thursday after OPEC reached some form of understanding on an oil production cut. The proposed deal should keep a floor under oil prices until OPEC’s official meeting in November when the details will be ironed out.
After a 6% surge yesterday, it’s understandable to see some profit-taking in oil markets as a little scepticism creeps in over the workability of the deal. Cutting output by 700m barrels a day is all well and good, but how that cut is going to be divided up across the producing nations is where consensus could quickly unravel.
Shares of oil majors Royal Dutch Shell (LON:RDSa) and BP (LON:BP) are leading the FTSE 100 higher; offsetting a dramatic 30% slump in the shares of Capita (LON:CPI) after the outsourcing firm revised lower its sales forecasts.
Capita shares got dumped after the firm revised down its full-year sales forecast in the region of 12%, in signs of an unexpectedly rapid slowdown. The uncertainty surrounding a legal dispute with Co-Op Bank over the administration of it mortgages and additional costs from a delayed IT project are at the centre of the forecast downgrade.
Merlin Entertainments (LON:MERL) shares dropped 4% following a trading update. Shares were already under pressure this week following a £5m fine for last year's Smiler ride accident. Revenues are up over the year but the company warned “security concerns” were still dragging on visitation at its parks and attractions.
Shares of Imagination Technologies (LON:IMG) slipped on Thursday after the UK software firm sold its loss-making Pure digital radio business to Australian firm Aventure. Imagination Tech won’t be sad to see the back of a unit that lost it £7.9m last year, but the price tag, which doesn’t include any debt, is probably not all shareholders could have hoped for.
Stocks in the US look set to open unchanged from yesterday’s closing prices. Shares of oil majors Exxon (NYSE:XOM) and Chevron (NYSE:CVX) are expected to be in focus after big gains following OPEC’s decision to cut output.
USA pre-opening levels
S&P 500: unchanged at 2,171
Dow Jones: 2 points higher at 18,339
Nasdaq 100: unchanged at 4,875
DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.