Oil and gas stocks fall as investors assess impact of Hurricane Harvey
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European stocks fell Monday, under pressure as the euro hit its highest level against the dollar in more than two years, as energy shares suffered after a hurricane knocked out refineries in Texas.
Trading was closed on the FTSE 100 as the U.K. observed the August Bank Holiday. That may mean lighter trading volumes than usual.
The Stoxx Europe 600 index dropped 0.5% to 372.13. No sector traded higher, and tech and basic materials shares lost the most ground. The pan-European index on Friday ended the session 0.1% lower (http://www.marketwatch.com/story/european-stocks-fight-for-gains-as-countdown-to-draghi-speech-begins-2017-08-25) and finished the week down by less than 0.1%.
Euro gain: Shares of exporters across Europe were pushed lower as the euro held onto the higher ground it reached after a speech by European Central Bank President Mario Draghi (http://www.marketwatch.com/story/draghi-criticizes-protectionism-deregulation-push-2017-08-28) in Jackson Hole, Wyo., on Friday.
Read: Recap of the Jackson Hole symposium coverage (http://blogs.marketwatch.com/capitolreport/2017/08/25/jackson-hole-fed-conference-live-blog-yellen-draghi-on-tap/?mod=MW_story_latest_news)
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Among big exporting names, shares of German auto makers BMW (BMW.XE) and Daimler AG (DAI.XE) fell 1.3% and 0.6%, respectively, and French beauty products maker L'Oreal SA (OR.FR) lost 1%.
Euro strength can hurt shares of exporters as it can erode revenue made overseas.
The shared currency pushed to its highest level in two-and-a-half years after Draghi's comments at the meeting of global central bankers. On Monday, it hit an intraday high of $1.1965, to reach its highest level since January 2015, according to FactSet data.
"Draghi didn't repress the euro bulls at his Jackson Hole speech on Friday," said Ipek Ozkardeskaya, senior market analyst at London Capital Group. "This has been perceived as a green light for speculation that the ECB may announce the much-expected quantitative easing tapering plans [at the bank's] September 7 policy meeting."
"The bias is positive" she said in her note. "Leveraged funds more than doubled their net positive euro positions last week."
The shared currency European trade bought $1.1930 at last check Monday, compared with $1.1924 late Friday in New York.
Harvey hits: Meanwhile, the Stoxx Europe 600 Oil & Gas Index shed 0.3% as energy companies and investors assessed the impact of Hurricane Harvey.
Shares of French oil producer Total SA (TOT) were down 0.3%, and Amsterdam-listed shares of Royal Dutch Shell PLC were off 0.4%.
The hurricane, now downgraded to a tropical storm, left a swathe of destruction in Texas after making landfall, knocking nearly 15% of U.S. refinery capacity out of commission (http://www.marketwatch.com/story/houston-flooding-expected-to-have-quite-awful-impact-on-energy-markets-2017-08-27). The heavy flooding it is causing could crimp even more of the country's energy infrastructure.
"It's bearish for crude oil and bullish for gasoline," Barnabas Gan, an analyst at OCBC in Singapore, told The Wall Street Journal.
U.S. gasoline futures shot up 4.1% to $1.734 a gallon early Monday. On the New York Mercantile Exchange, crude futures shed 0.9% to $47.47 a barrel, but Brent crude prices rose 0.2% to $52.55 a barrel.
(http://blogs.marketwatch.com/capitolreport/2017/08/25/jackson-hole-fed-conference-live-blog-yellen-draghi-on-tap/)Stock movers: Altice NV (ATC.AE) shares were up 0.9% after the telecommunications conglomerate said it will buy back up to 1 billion euros in shares (http://www.marketwatch.com/story/altice-to-buy-back-up-to-1-billion-in-shares-2017-08-28) through Aug. 31, 2018.
"Going forward, Altice will continue to assess the use of excess cash for either significantly accretive M&A opportunities or further shareholder returns," Altice said in a statement.
Indexes: Germany's DAX 30 index fell 0.5% to 12,112.41. France's CAC 30 index gave up 0.2% at 5,094, and Spain's IBEX 35 was down 0.1%.
(END) Dow Jones Newswires
August 28, 2017 05:13 ET (09:13 GMT)