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European stocks and oil prices rise as OPEC argues

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An OPEC+ output dispute has driven oil prices higher, boosting energy shares on London's FTSE 100 index./AFP
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Jul 06, 2021 - 07:10 AM

LONDON, UNITED KINGDOM — European stock markets found some reasons to cheer Monday after a mainly downbeat Asian session, with London gaining on takeover news and rising oil prices as OPEC pushed back a contentious summit.

As closing bells rang in the eurozone, Frankfurt stocks had risen by 0.1 percent and Paris was up by 0.2 percent.

With US markets shut for the Independence Day holiday, momentum had paused on the other side of the Atlantic, following another record level on Friday.

London advanced by 0.6 percent, with sentiment boosted by news of a possible bidding war for British supermarket chain Morrisons.

The energy sector was buoyed meanwhile by rising oil prices, as top crude producers in the OPEC+ alliance failed to reach a deal on lifting output.

Morrisons soars 

“European indices turned positive after a weaker open,” remarked Fawad Razaqzada, an analyst at ThinkMarkets.com while pointing to purchasing manager indices (PMIs) in the eurozone and Britain that had been revised higher.

Flash readings from Italy and Spain in particular were better than expected, and “markets remain convinced that inflation will not accelerate to uncomfortably high levels,” he added.

In London, Morrisons shares soared by 11.6 percent after US private equity firm Apollo Global Management revealed it was mulling a counter-bid for the food retailer.

Britain’s fourth biggest supermarket on Saturday accepted a separate £6.3-billion ($8.7-billion, 7.3-billion-euro) takeover from a consortium of investment groups.

That came after Morrisons last month rejected a £5.5-billion offer from US private equity firm Clayton, Dubilier & Rice.

“We have now got confirmation of three parties interested in Morrisons — and fear of missing out could attract further interest,” noted Russ Mould, investment director at stockbroker AJ Bell.

OPEC’s output row 

Oil prices rose as the United Arab Emirates battled with fellow OPEC members and other producers over the rate and timing of their next output increase.

The rare public dispute led to a summit of OPEC members and 10 allies being pushed back to an undetermined date, a source close to the matter told AFP.

The UAE has bitterly opposed a proposal by the alliance to raise production, causing a stalemate that could derail efforts to curb rising crude prices amid a fragile post-pandemic recovery.

“It’s the whole group versus one country, which is sad to me but this is the reality,” Saudi Energy Minister Prince Abdulaziz bin Salman told Bloomberg television, suggesting the UAE were isolated within the 23-member OPEC+ bloc.

Officials have laboured for days over an agreement to pump more as demand picks up with the global recovery and supplies shrink, with fears that failure to find common ground could send prices soaring.

Crude prices are now around levels last seen in 2018.

Key figures at 1600 GMT 

EURO STOXX 50: UP by less than 0.1 percent at 4,087.37 points

London – FTSE 100: UP 0.6 percent at 7,164.91 (close)

Frankfurt – DAX 30: UP by less than 0.1 percent at 15,661.97 (close)

Paris – CAC 40: UP 0.2 percent at 6,567.54 (close)

Tokyo – Nikkei 225: DOWN 0.6 percent at 28,598.19 (close)

Hong Kong – Hang Seng Index: DOWN 0.6 percent at 28,143.50 (close)

Shanghai – Composite: UP 0.4 percent at 3,534.32 (close)

New York – Dow: closed for Independence Day

Euro/dollar: FLAT at $1.1865

Pound/dollar: UP at $1.3851 from $1.3824 at 2100 GMT

Euro/pound: DOWN at 85.66 pence from 85.83 pence

Dollar/yen: DOWN at 110.92 yen from 111.05 yen

Brent North Sea crude: UP 0.8 percent at $76.76 per barrel

West Texas Intermediate: UP 0.8 percent at $75.78 per barrel

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