Europe midday: Shares swing to gains despite soaring oil prices

by | Mar 2, 2022

European shares swung into positive territory at midday as investors focused on strong corporate earnings, despite surging oil prices on fears of supply disruption amid Russia’s invasion of Ukraine.
The pan-European Stoxx 600 index was 0.6% higher. All major regional bourses were higher and US futures were higher.

Russian forces continued to batter Kharkiv, Ukraine’s second largest city, and were set to encircle the capital Kyiv. A growing number of companies are cutting ties with an increasingly isolated Moscow, with Airbus, Ford, Google, and, belatedly, Apple joining the list.

Crude oil prices surged by almost 7%, with Brent crude soaring past $110 per barrel for the first time in eight years. US crude futures also saw big gains, rising around 5.6% to $109 per barrel.

The rise comes despite the International Energy Agency saying it would release 60 million barrels of oil from global reserves to ease supply constraints.

In equity news, Ericsson slumped after the Swedish telecom gear maker said it had been informed that disclosures it made to the US Department of Justice about an internal investigation into conduct in Iraq were insufficient.

Finland’s Neste soared 16% as the renewable fuels producer said overnight it has agreed to establish a 50/50 joint venture with Marathon Petroleum to produce renewable diesel, after the conversion of Marathon’s refinery in Martinez, California.

British insurer Hiscox gained after swinging to a full-year pre-tax profit for 2021 and issuing a positive outlook.

Just Eat Takeaway gained after the online food platform reported better-than-expected results with revenues jumping by more than a third.

UK house builder Persimmon was higher as the company issued an upbeat set of results and said it remained confident for the current year, despite rising interest rates, after strong demand boosted annual sales.

Weir Group shares rose as the company reported a “strong” 2021 with orders growing thanks to demand for recurring aftermarket consumables now surpassing pre-Covid levels.

Russian steelmaker Evraz and Anglo-Russian precious metals miner Polymetal were both trading up following heavy losses on Tuesday. Polymetal was also in focus after the release of its full-year results.

Oil giants Shell and BP gushed higher amid surging oil prices.

Aviva gained even as the insurer reported a 28% fall in annual profits, reflecting lower operating earnings from discontinued operations and also announced the £385m acquisition of Succession Wealth.

Airlines were under the cosh after the US banned Russian flights from its airspace, with BA and Iberia owner IAG and budget airlines Wizz Air and easyJet all sharply lower.

Elsewhere, Royal Mail was hit by a downgrade to ‘sell’ from ‘hold’ at Liberum, which pointed to a margin squeeze risk from pay inflation. The broker also cut its price target on the shares to 355p from 470p.

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