EUROPE MARKETS: European Stocks Hold Steady Around 2-week High, But Thomas Cook Plunges

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Crude rally helps lift oil and gas stocks

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European stocks steadied at a near two-week high Wednesday, finding support from gains in the oil and gas sector on the back of rising crude oil prices.

But stocks in the travel sector came under pressure after Thomas Cook Group PLC flagged a price battle in the Spanish market.

What markets are doing: The Stoxx Europe 600 was up less than 1 point at 388.15, after swaying between tiny gains and losses. On Tuesday, the pan-European index rose 0.4% (http://www.marketwatch.com/story/european-stocks-look-for-2nd-straight-win-despite-choppy-trade-2017-11-21) to close at its highest since Nov. 10, according to FactSet data.

In Wednesday's session, utility, and oil and gas shares led the advancers, while tech and consumer services shares led the decliners.

German and French stocks pulled back from small gains earlier in the session, after hitting nearly two-week highs on Tuesday. In Frankfurt, the DAX 30 index lost 0.3% to reach 13,129.02, and in Paris, the CAC 40 shed 0.1% to hit 5,359.86.

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But Spain's IBEX 35 index was up 0.4% at 10,028.30. In London, the FTSE 100 index was up 0.3% to 7,429.77 ahead of the launch of the U.K. government's tax and spending plans.

The euro bought $1.1764, more than $1.1738 late Tuesday in New York. Against the pound, the shared currency fetched GBP0.8878, slightly higher than GBP0.8867 late Tuesday.

What's driving markets: Energy stocks were bolstered by a rise in crude prices , with the Stoxx Europe 600 Oil & Gas up 0.5%.

The gains for oil came on optimism about supply, after the American Petroleum Institute late Tuesday reported a larger-than-expected estimated decline in U.S. crude. Investors will watch U.S. government supply data due at 10:30 a.m. Eastern Time, or 3:30 p.m. London time, for confirmation of that drop.

In the U.K., the Conservative-led government will present its first budget since the snap general election in June. Chancellor of the Exchequer Philip Hammond is seen as having little room to maneuver as the Conservatives don't have a parliamentary majority on their own. The Autumn Budget is expected to be revealed in parliament at around 12:30 p.m. London time, or 7:30 a.m. Eastern.

Read:5 things to watch for in U.K. budget (http://www.marketwatch.com/story/5-things-to-watch-for-in-uk-budget-2017-11-22)

After the close of European trade, the minutes from the U.S. Federal Reserve's meeting earlier this month will be released (http://www.marketwatch.com/story/fed-minutes-likely-to-greenlight-rate-hike-in-december-but-inflation-debate-still-unsettled-2017-11-21). The minutes are widely expected to show the central bank is still on course to raise its benchmark short-term interest rate to a range of 1.25% to 1.5% in December.

What strategists are saying: "We may not expect to see too much today in terms of FTSE 100 or pound moves, unless the Chancellor breaks the mold and announces polices out of left field that could have a significant effect on what Brexit means for businesses, or measures that will ease the pressures on the economy as the U.K. enters in 2018, a year that holds far more economic questions than it does answers,"

-- James Hughes, chief market analyst at Axi Trader, in a note.

"Coming with the API announcing a larger than expected drawdown in U.S. oil stocks, suddenly the recent highs on oil are back in range. This jumped has helped to support improved sentiment, which, along with recent positive U.S. economic data, has driven equity markets to rise once again."

-- Richard Perry, market analyst at Hantec Markets, in a note

Travel stocks: Thomas Cook shares (TCG.LN) tumbled 11% after the travel services company said in its full-year 2017 earnings report (http://www.marketwatch.com/story/thomas-cook-margins-take-a-hit-shares-fall-2017-11-22) that gross margin was reduced in part because of a competitive market in Spain. The company's fiscal pretax profit rose to GBP46 million.

"Demand for our holidays to Turkey and Egypt is very strong, which we expect will start to alleviate the margin pressures caused by the high concentration of holidays to Spain in 2016 and 2017," said Thomas Cook in its report.

The Stoxx Europe 600 Travel & Leisure Index was down 0.2%, hurt by the slide for Thomas Cook. Shares of rival travel services company TUI AG fell 1.%, but pared deeper losses earlier in the session.

Energy stocks: In the oil and gas group, Tullow Oil PLC (TLW.LN) climbed 3.5%, Total SA (TOT) added 0.7%, and Repsol SA (REPYY) picked up 1.1%. A Repsol-led consortium plans to invest $900 million for exploration and production in southern Bolivia (http://www.marketwatch.com/story/repsol-led-group-to-invest-900m-in-bolivia-efe-2017-11-22).

Other movers: Schibsted ASA shares (SCHA.OS) dropped 8% after the Norway-based media company said it has completed the placement of 11.88 million new B-shares, equal to 2.5% of existing total share capital. Gross proceeds came in at 2.51 million Norwegian kroner ($305 million).

Akzo Nobel NV (AKZOY) shares were up 1.7% after the Dutch paint company and its U.S. rival Axalta Coating Systems Ltd. (AXTA) said they've abandoned talks to merge. (http://www.marketwatch.com/story/akzo-nobel-in-merger-talks-with-uss-axalta-2017-10-28)

(END) Dow Jones Newswires

November 22, 2017 05:59 ET (10:59 GMT)