Oil Price Decline Boosts European Stocks Despite Mideast Uncertainty
European stocks are on track to snap their three-week losing streak as oil prices retreat. The pan-European STOXX 600 rose 0.6% to 640.43 points, putting the benchmark on course for a nearly 1% weekly advance.
The recent decline in oil prices has contributed to the resurgence of European stocks. Truce hopes outweighed Houthi attacks on Saudi Arabia, causing oil prices to fall. Negotiators are exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran.
Energy shares fell 0.7% and were the biggest sectoral losers. However, oil-price-sensitive airline stocks advanced, with Ryanair and Lufthansa gaining more than 2% each. The travel and leisure index rose 1.2%, while basic resource shares rose 1.14% on gains in Pan African Resources and Glencore PLC.
UBS upgraded its rating on Glencore to 'buy' from 'neutral'. Euro zone government bond yields were on track for their seventh consecutive weekly rise as crude prices remained near $100 a barrel and increasingly hawkish signals from central banks pushed up expectations for policy rates. Daniela Hathorn, a senior market analyst at Capital.com, warned that further tightening by the European Central Bank could prove 'damaging for the economy'.