European Markets Pared Early Gains After Crude Oil Prices Turned Lower

(RTTNews) - The European markets got off to a strong start Monday, but began to weaken late in the morning after crude oil prices tumbled further. There was no relief to be found in the afternoon, due to the early struggles on Wall Street. However, the European markets did manage to hold onto some modest gains.

Crude oil prices dropped below $43 a barrel today, reaching their lowest level since the middle of summer. Investor concerns over a global supply glut were largely responsible for the weakness. OPEC's Monthly Oil Market Report revealed daily oil production for the cartel of 33.64 million barrels for October. That's up by 240,000 bpd from September.

Markets have rushed into concluding that the U.S. economy is poised for more growth on an expansionary budget policy, after Donald Trump won the presidential election last week, European Central Bank Vice President Vitor Constancio said Monday.

Optimism is being driven by the insight that fiscal stimulus at this stage of economic cycle can break the liquidity trap that has hampered growth in the advanced economies, the policymaker said in a speech at the Euro Finance Week event in Frankfurt.

Constancio pointed out that several commentators have hasted in concluding that the recent geo-political developments will have, after all, economic benefits.

"This may be the case in the short-term but the real negative effects of heightened uncertainty can come later," he said.

"We should be cautious in drawing hasty, positive conclusions from those market developments because they may not necessarily indicate that the world economy will have an accelerating recovery with higher growth."

"So far, those developments point to a U.S. rise in economic growth, but in the context of an "America first" policy," he added.

The pan-European Stoxx Europe 600 index advanced 0.28 percent. The Euro Stoxx 50 index of eurozone bluechip stocks increased 0.32 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.43 percent.

The DAX of Germany climbed 0.24 percent and the CAC 40 of France rose 0.43 percent. The FTSE 100 of the U.K. gained 0.34 percent and the SMI of Switzerland finished higher by 0.21 percent.

In Frankfurt, industrial group Siemens gained 1.25 percent after it agreed to buy design automation and industrial software provider Mentor Graphics Corp. for $37.25 per share in cash, which represents an enterprise value of $4.5 billion.

Utility RWE fell 3.20 percent after reporting a drop in nine-month adjusted net income.

In Paris, AXA climbed 2.53 percent. The insurer has entered into an agreement with Marsh to sell Bluefin Insurance Group Ltd, its P&C commercial broker in the U.K.

In London, Taylor Wimpey jumped 3.09 percent. The house builder remains confident of strong sales in 'robust' U.K. housing market, despite the implication of Brexit being unclear.

Business support services group DCC reported a strong first-half performance and said it expects full-year profit to be ahead of expectations. The stock surged 2.82 percent.

Glencore advanced 1.24 percent after it was upgraded to "Buy" at Jefferies.

William Hill increased 1.48 percent. The betting giant reported a six percent net revenue growth in the second half and said it expects FY operating profit to be at the top end of its previous guidance.

Novartis dipped 0.48 percent in Zurich on news the pharmaceutical company is considering the sale of its struggling Alcon eye care division.

Debt collection firm Intrum Justitia surged 7.80 percent in Stockholm after the company unveiled plans to acquire Lindorff in a $1.96 billion deal.

Eurozone industrial production declined less than expected in September, data from Eurostat revealed Monday. Industrial output dropped 0.8 percent in September from August, when it grew by revised 1.8 percent. This was the biggest fall in four months but smaller than the expected drop of 1 percent.

Germany's manufacturing employment increased in September, Destatis reported Monday. The number of people worked in local manufacturing units increased by around 37,000 or 0.7 percent from prior year in September.

Italy's consumer prices decreased more than initially estimated in October, final figures from the statistical office Istat showed Monday. The consumer price index fell 0.2 percent year-over-year in October, revised from a 0.1 percent drop reported earlier. In September, prices had risen 0.1 percent.

China's industrial production and retail sales grew less-than-expected in October, while fixed asset investment growth improved slightly, figures from the National Bureau of Statistics revealed Monday.

Industrial production increased 6.1 percent year-on-year in October, at the same pace of growth as seen in September. This was slower than the 6.2 percent expansion economists had expected.

At the same time, retail sales growth eased to 10 percent from 10.7 percent in September, signaling a slowdown in domestic demand. A similar growth was last seen in May. The annual pace of expansion was expected to stabilize at 10.7 percent.