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(Alliance News) -Â The investment mood was mixed across Europe at the start of the week, but the FTSE 100 was powering ahead of European counterparts as London-listed oil majors Royal Dutch Shell and BP were boosted by OPEC's weekend deal.
"Shares in Europe traded in a mixed pattern on Monday as market sentiment becomes more nuanced. The risk appetite remains, especially after last Friday's US [nonfarm payrolls report] topped estimates and sparked hopes of a quick recovery in the second half of the year. Demand is rising in almost all sectors and countries around the world continue to ease lockdown while the spread of virus slows," said Pierre Veyret, technical analyst at ActivTrades.
"Nonetheless, last week's much better-than-expected US jobs report may have pushed some investors to price a less dovish tone from the Fed's upcoming meeting on Wednesday, which could lead to less directional markets this week," Veyret added.
The FTSE 100 index was up 15.60 points, or 0.2%, at 6,499.90 on Monday at midday. The mid-cap FTSE 250 index was up 112.07 points, or 0.6%, at 18,341.39. The AIM All-Share index was down 0.7% at 897.86.
The Cboe UK 100 index was up 0.2% at 11,002.29. The Cboe 250 was up 1.0% at 15,903.05, and the Cboe Small Companies up 1.7% at 9,962.48.
In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both down 0.5% in early afternoon trade.
Helping the FTSE 100 outperform counterparts in continental Europe was an OPEC deal over the weekend.
Brent oil was quoted at USD42.76 a barrel Monday midday, up from USD42.16 late Friday after OPEC members, led by Saudi Arabia, and other key oil producers agreed on Saturday to extend historic output cuts through July.
The North Sea benchmark hit a high of USD43.30 overnight - its highest level in three months. A month ago, Brent was struggling to trade above USD30 a barrel, while the near-contract futures price of US benchmark West Texas Intermediate actually fell below zero.
The 13-member cartel and its allies, notably Russia, decided to extend by a month deep May and June cuts agreed in April to boost prices, the Organization of the Petroleum Exporting Countries said in a statement. But Mexico, which had already made clear ahead of the talks that it "could not adjust...production further", announced that it would not be complying.
As a result of the accord, Royal Dutch Shell 'A' and 'B' shares were up 4.9% and 4.8% respectively, while BP was up 3.3%.
Gold also was buoyant at the start of the week, reflecting the mixed mood. The precious metal was quoted at USD1,694.10 an ounce, up from USD1,677.02 late Friday.
Fellow safe haven the Japanese yen also firmed. Against the yen, the dollar was quoted at JPY109.37, down from JPY109.75.
The pound was quoted at USD1.2646 on Monday, lower from USD1.2714 at the London equities close Friday. The euro was quoted USD1.1284, down from USD1.1307 late Friday.
Industrial production in Germany decreased significantly again in April because of the coronavirus pandemic, Destatis said, after a marked decrease in March.
In April, production was down by 18% on the previous month on a price, seasonally and calendar adjusted basis. The restated March figure showed a decrease of 8.9% in production from February.
The year-on-year decrease was 25% in April. This was the largest decline since the beginning of the time series in January 1991.
More positively, Sentix said signs are pointing to a global economic upturn, as more countries on the European continent emerge from lockdown.
Sentix's index for the eurozone rose to negative 24.8 in June from negative 41.8 in May. That compared with the consensus forecast, cited by FXStreet, for a reading of negative 22.5.
Wall Street is on course for an upbeat start on Monday. The Dow Jones is called up 0.6%, the S&P 500 up 0.4% and the Nasdaq up 0.1%.
In New York pre-market trade, shares in Gilead Sciences were up 3.5%. Bloomberg over the weekend reported London-listed AstraZeneca had approached the California-headquartered biopharmaceutical firm over a near GBP200 billion blockbuster merger that would be the biggest pharmaceutical merger on record.
However, according to the Telegraph, a tie-up is unlikely, citing sources that argued that AstraZeneca would not be chasing down a merger at a time when it is racing to create a vaccine against Covid-19. Spokesmen for AstraZeneca and Gilead declined to comment, the article said.
AstraZeneca shares were down 2.3% in London.
Michael Hewson at CMC Markets commented: "Whether any deal between AstraZeneca and Gilead happens or not, and it appears that while an approach has been made talks haven't gone beyond initial soundings, this story could well be the start of further consolidation in this sector."
Elsewhere in London, airlines were higher despite two-week quarantine rules for UK arrivals coming into force.
International Consolidated Airlines, owner of British Airways, was up 6.0% and easyJet up 5.0%.
Those arriving in the UK will now be required to self-isolate for 14 days under government measures to guard against a second wave of coronavirus. All passengers – bar a handful of exemptions – will have to fill out an online locator form giving their contact and travel details, as well as the address of where they will isolate.
British Airways has begun legal proceedings over what it calls the UK government's "unlawful" quarantine measures.
In the FTSE 250, Plus500 was down 5.8%. The contracts for difference trading provider said it continued to see record levels of customer trading activity as heightened levels of market volatility persisted into April and May, but customers won at Plus500's expense more often than not.
Plus500 said revenue from customer income remains at record levels, generating around USD249.0 million in the second quarter to date. Revenue from customer income means revenue from customer spreads and overnight charges.
However, the company said that total revenue for the second quarter to date stands at less than half of that, at USD102.5 million, as customer trading performance has been positive for the customers and negative for Plus500.
Plus500 differentiates itself from online trading peers as it acts as a "market maker" for its customers, meaning if the customers bet right more often than wrong, the company can lose money.
Amigo Holdings slumped 22% after terminating its sales process as a potential acquirer with whom the company had been in discussions has withdrawn.
The subprime lender also reported the formal resignation of Stephan Wilcke as board chair and said it has decided to cancel its final dividend for the year to March 31 due to a material rise in complaints and the associated costs in resolving them.
Amigo said it has no other acquisition offers and therefore is terminating its formal sale process with immediate effect. The lender had been in talks with an unnamed buyer over a potential 20.9p each offer for Amigo, valuing the entire company at roughly GBP100 million, compared to its current market capitalisation of GBP62.8 million.
Lookers was down 15% after the car deal said it will not be able to publish its results by the June 30 deadline, meaning its shares likely will be temporarily suspended from trading in July.
The initial reason behind the results delay was a fraud investigation, following a March announcement that Lookers had identified potential fraudulent transactions in one of its operating divisions. Audit firm Grant Thornton is leading the investigation.
Despite this, Lookers had been expecting to post its results by the end of June. Now, due to "the additional procedures that the company and Deloitte will now need to perform in order to finalise the 2019 results", this deadline will not be met.
Having spoken to the UK Financial Conduct Authority, Lookers said it expects its shares to be suspended from July 1 until its results are published. This is to take place "at the earliest possible date and by no later than the end of August".
Further, the company's auditor, Deloitte, has told Lookers that it plans to resign once the 2019 results are published. Lookers has begun "a competitive tender process to appoint a new auditor".
By Lucy Heming;Â lucyheming@alliancenews.com
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