European shares gain on brighter investor sentiment

on Nov 28, 2017

European shares were trading in positive territory around midday Tuesday. Investor sentiment was buoyed by UK banks passing important stress tests, while an improved oil outlook from Shell was also supportive.

By 1300 BST, the EUROSTOXX 600 was trading 0.37% higher at €386.29, while the EUROSTOXX 50 was 0.35% in the green.

Regional bourses were also upbeat. The German DAX gained 0.18%, the French CAC was 0.40% higher, while the Spanish IBEX was up 0.34%.

UK banks can handle ‘disorderly’ Brexit

UK banking stocks were mixed Tuesday, with any gains supported by the latest result of stringent Bank of England (BOE) stress tests.

“For the first time since the Bank of England launched its stress tests in 2014, no bank needs to strengthen its capital position as a result of the stress test,” the BOE said.

“The 2017 stress test shows the UK banking system is resilient to deep simultaneous recessions in the UK and global economies, large falls in asset prices and a separate stress of misconduct costs,” it added.

By 1300 BST, HSBC shares were 0.76% higher. However, after making gains near the open, shares in Lloyds Banking Group were 1.74% in the red. Standard Chartered shares also lost early gains to trade 0.49% lower.

Oil outlook supports

Elsewhere, an update from Shell raising its outlook for oil prices to around the $60 per barrel level was supportive. Shell shares rose 3.35% to £2,444.00. Total shares were 0.42% higher, while shares in Italian energy firm Eni were up 0.44%.

And, other energy related shares made gains, too. Siemens Gamesa Renewable energy shares rose 6.5%, after the firm signed a deal with Sweden’s Vattenfall, for three new wind turbines.

Elsewhere, Ocado shares surged 20.7% on news the grocer had signed a deal to develop an online shopping platform in France. Unilever shares gained 1.85%, meanwhile, as the firm stuck to its original positive 2017 guidance.