MW: Europe stocks sag under the weight of weaker oil
Lower oil prices cut into European stocks on Monday, pressuring shares of heavyweights like Total SA and Statoil ASA.
The Stoxx Europe 600 index SXXP, -2.13% fell 1.7% to 322.19. The index closed down 1.2% on Tuesday, with all sectors in the red, as U.S. stocks posted the worst losses in a week. The moves came as a sharp drop in oil prices pummeled investors’ appetite for riskier investments such as equities.
Every sector was down Wednesday in Europe, led by oil and gas stocks. Shares of Total TOT, -3.57% FP, -2.45% dropped 2.4%, while Statoil STL, -4.66% tumbled 4% and Royal Dutch Shell PLC RDS.A, -4.07% RDS.B, -4.23% RDSA, -1.84% RDSB, -2.32% fell 3.5%.
Those losses came as oil prices CLJ6, -3.33% dropped another 3% on Wednesday, on the heels of a nearly 5% loss after Saudi Arabia’s oil minister Ali al-Naimi shattered hopes for oil production cuts.
Citi cut its sector rating on European miners to neutral from bullish in a note to clients Wednesday. Its analysts said risk-reward is balanced for the miners, given the run-up in share prices recently. They maintain a neutral recommendation on Rio Tinto PLC RIO, -3.85% RIO, -4.70% and sell on Anglo American PLC AAL, -8.18% , and recently cut BHP Billiton BLT, -8.03% BHP, -4.74% BHP, -8.22% to neutral. Glencore PLC GLEN, -8.30% is the only miner with a buy recommendation at Citi.
Shares of BHP Billiton tumbled 8% a day after the miner posted a massive first-half loss and slashed its dividend, triggering a 6% slide for its shares Tuesday. Anglo American and Glencore were both off 5% in early action Wednesday.
Indexes: In Frankfurt, the DAX 30 DAX, -2.36% fell 1.8% to 9,4249.04. The FTSE 100 index UKX, -1.42% dropped 1.4% to 5,877.24.
France’s CAC 40 PX1, -2.13% was down 1.6% to 4,168.22. French consumer confidence fell unexpectedly in February from January, statistics showed Wednesday.
Spain’s IBEX 35 IBEX, -2.76% lost 2% to 8,101.80, while Italy’s FTSE MIB FTSEMIB, -2.24% dropped 1.4% to 16,921.19.
