Europe: Shares end flat after volatile day; energy, Spain up
[LONDON] European stocks ended little changed on Tuesday after a volatile day but energy plays rose as oil prices recovered, while Spanish equities rebounded following a sell-off in the previous session prompted by concerns over a political stalemate.
The pan-European FTSEurofirst 300 index, which had fallen 1.2 per cent on Monday, edged down 0.04 per cent, while the euro zone's blue-chip Euro STOXX 50 index was up 0.04 per cent.
Trading was volatile as the holiday season approached and some investors remained cautious over prospects for next year. "There are no easy gains to make," said Marco Vailati, head of research and investment at Italy's Cassa Lombarda. "Companies must deliver on the earnings front, the Greek crisis is still unresolved and there is political instability in Spain. Against this uncertain backdrop, investors should be opportunistic and seek to buy on the dips and sell during the moments of euphoria," he said.
The FTSEurofirst and Euro STOXX 50 are both up by around 3 per cent this year, with economic stimulus from the European Central Bank having helped support markets despite a slowdown in China and political uncertainty in Spain and Greece.
On Tuesday, oil stocks such as BP and Royal Dutch Shell recovered as oil prices edged away from multi-year lows, helping Britain's FTSE index gain 0.8 per cent.
"The oil price is still the big driver of market sentiment at the moment for stock markets, but I'm not sure if it will hold above those lows, given the concerns about a glut of supply," said Hantec Markets' analyst Richard Perry.
The Madrid bourse closed up 0.5 per cent as it rebounded from a sell-off in the previous session after an inconclusive election result. Despite the uncertainty, the Bank of Spain increased its growth forecasts for the Spanish economy but warned over risks for reforms and budget policies.
Shares in USG People surged 29 per cent after Japanese employment agency Recruit agreed to buy the Dutch staffing company for 1.4 billion euros, a 31 per cent premium to its Monday closing price.
Finnish software company Innofactor also rose 4 per cent after it announced plans to merge with Swedish Cinteros AB.
German chipmaker Infineon was among the top three losers on the FTSEurofirst index with a 2 per cent drop that traders attributed to profit taking.
REUTERS
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