European Stocks Rise for a Fifth Week as Energy Shares Rally
(Bloomberg) -- European equities rose for a fifth week as oil companies gained on Friday and investors digested the latest developments in Brexit negotiations.
The Stoxx Europe 600 Index added 0.6% by the close in London, bringing the advance in the week to 0.2%. Energy shares led sector gains today as oil bounced after OPEC+ reached a compromise deal to gradually taper production cuts. That added to the FTSE 100 Index’s outperformance, with the gauge up 0.9% even as the British government said the prospects of an imminent Brexit trade deal had receded.
European stock gains have plateaued at a February high after last month’s record rally, fueled by optimism that coronavirus vaccines would enable a return to normality. A report showing U.S. employment gains slowed in November bolstered expectations for more federal stimulus.
A period of consolidation would “appear normal and even healthy, and would offer investors a better entry point,” Barclays Plc strategists led by Emmanuel Cau wrote in a note. “With volumes lightening up as we enter December, which is typically a good month for equities, any continued grind higher in reflation trades may mean investors do not get their hoped for buying opportunity, as the fear of missing out (FOMO) outweighs the short-term risks.”
The Stoxx 600 Energy Index jumped 3.1%. Total SE, BP Plc and Royal Dutch Shell Plc were among the biggest advancers, each rising more than 3%.
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