European markets grapple with lower liquidity, crude's crumble
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European stocks notched a slight loss Thursday, hampered by lower volume and a slide in oil prices following news the Organization of the Petroleum Exporting Countries will hold back from making deeper production cuts.
Shares in Petrofac Ltd. (PFC.LN) led the way lower, plunging 30% after the oil services company said it suspended Chief Operating Officer Marwan Chedid until further notice (http://www.marketwatch.com/story/petrofac-suspends-coo-as-uk-conducts-probe-2017-05-25).
The Stoxx Europe 600 fell 0.1% to end at 392.14, after darting in and out of positive territory during the session.
While major stock exchanges were open Thursday, Germany and Switzerland were among the countries observing the Ascension holiday.
Germany's DAX was down 0.2% to end at 12,621.72, but had been higher during the session.
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Intraday, the "DAX took a 100+ point plunge in the space of a few minutes. This looks likely to be the result of a bank holiday in Germany that makes for thinner liquidity and higher volatility as a result," said Neil Wilson, senior market analyst at ETX Capital, in a note.
"It's all very thin and choppy out there with French banks also closed today."
Petrofac was the biggest loser Thursday among Stoxx Europe 600 components. The company is under U.K. investigation on suspicion of bribery, corruption and money laundering, and it has said it's cooperating with authorities. Chedid has resigned from Petrofac's board.
France's CAC 40 index was down 0.1% to finish at 5,337.16, while the U.K.'s FTSE 100 finished fractionally higher at 7,517.71 (http://www.marketwatch.com/story/ftse-100-wobbles-with-opec-decision-in-sight-2017-05-25) following choppy trade.
Crude crumbles: The Stoxx Europe 600 Oil & Gas Index fell 1.2%, reversing course after oil prices sank roughly 2% (Oil%20slides%20below%20$51%20as%20OPEC%20agrees%20on%209-month%20output%20extension) as Saudi Arabia's oil minister Khalid al-Falih ruled out deeper cuts to oil production in any extension to an OPEC output deal.
But reports said the Organization of the Petroleum Exporting Countries did agree to a nine-month extension to the current deal at Thursday's meeting in Vienna, Austria, as expected.
Read:OPEC says it will extend production cuts through March 2018 (http://www.marketwatch.com/story/opec-says-it-will-extend-production-cuts-through-march-2018-2017-05-25)
Oil prices have been climbing in recent weeks in anticipation that OPEC and non-OPEC members would extend production cuts that were agreed last November as they worked to tackle global oil oversupply. But investors appeared disappointed that deeper cuts won't be featured in an agreement.
In the European oil group, Italian oil producer Eni SpA (ENI.MI) dropped 1.9%, BP PLC (BP.LN) (BP.LN) gave up 1.1%, and France's Total SA (TOT) (TOT) shed 0.9%. Among oil services providers, Amec Foster Wheeler PLC (AMFW.LN) fell 5.6% and Saipem SpA (SPM.MI) gave up 3.1%.
Other movers: Daily Mail & General Trust PLC (DMGT.LN) slid 6.9% after posting a fall in pretax profit (http://www.marketwatch.com/story/daily-mail-general-trust-pretax-profit-slides-2017-05-25) for the first half of fiscal 2017 as it booked costs related to the company's restructuring. The result was in line with the expectations set by the company, whose portfolio of businesses include the Daily Mail newspaper.
Intermediate Capital Group PLC (ICP.LN) closed 14% higher after the investment manager reported a rise in both its profit and its dividend (http://www.icgam.com/shareholders/documents/Full%20year%20results%20announcement.pdf).
Meanwhile, the euro was buying $1.1224, not far off from $1.1220 logged late Wednesday in New York. The U.S. dollar was slightly lower after minutes from the Federal Reserve's latest meeting out Wednesday showed policy makers appeared set to start shrinking the bank's massive balance sheet. The minutes also showed that most Fed officials said it would "soon" be time to raise rates again.
Read:Seeing another rate hike 'soon,' Fed outlines plan to reduce bondholdings, minutes show (http://www.marketwatch.com/story/seeing-another-rate-hike-soon-fed-outlines-plan-to-reduce-bond-holdings-minutes-show-2017-05-24)
(END) Dow Jones Newswires
May 25, 2017 12:22 ET (16:22 GMT)