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GLOBAL MARKETS-Recovering oil prices lift European shares

Published 24/12/2015, 08:22 pm
© Reuters.  GLOBAL MARKETS-Recovering oil prices lift European shares
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(From Dec. 24 to 31, only one Global Markets wrapup a day will move from London and none on Dec. 25. Normal coverage will resume on Jan. 4)

By Marius Zaharia

LONDON, Dec 24 (Reuters) - A fourth consecutive day of gains in oil prices helped lift European shares on Thursday, while an almost 1 percent fall against the euro this week took the shine off a strong 2015 for the dollar.

Falling supplies and the lifting of a 40-year old ban on most U.S. crude exports pushed front-month West Texas Intermediate (WTI) crude futures CLc1 32 cents higher at $37.82 per barrel. They were set for the biggest weekly gain since early October. O/R

Internationally traded Brent futures LCOc1 rose 30 cents to $37.66, having fallen about 35 percent this year.

Cheapening oil prices have battered energy companies and lowered inflation expectations, pushing government borrowing costs lower and reinvigorating bets on further European Central Bank monetary policy easing.

Britain's blue-chip FTSE 100 index .FTSE rose 0.3 percent, while Spain's IBEX .IBEX advanced 0.7 percent and France's CAC .FCHI edged down 0.1 percent.

Germany's DAX .GDAXI stock market was closed, with other markets due to close early for the Christmas holiday. Oil majors such as BP BP.L and Royal Dutch Shell RDSa.L climbed by around 1 percent.

"The London market is benefiting from the latest rebound in crude oil prices," said Spreadex analyst Connor Campbell.

European bond markets were closed. The euro EUR= was up 0.3 percent at $1.0943, while the dollar .DXY was down 0.3 percent against an index of rival currencies, having risen almost 9 percent this year.

Against the euro, the dollar lost 0.8 percent this week, having gained 11 percent since January in the run-up to the first U.S. Federal Reserve interest rate hike since 2006.

"As we move closer towards 2016 there are few calls for the dollar to repeat its 2015 strength, even despite the Fed now finally having commenced its tightening cycle," said Simon Smith, chief economist at FXPro.

The gains in European shares mirrored the upbeat mood in Asia and on Wall Street. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.6 percent, after U.S. stocks posted their third straight session of gains.

But China's blue-chip CSI300 index .CSI300 and the Shanghai Composite Index .SSEC were down 0.7-1.0 percent after regulators tightened rules for insurers investing in listed firms.

Japan's Nikkei .N225 ended 0.5 percent lower after a stronger start.

Japanese Prime Minister Shinzo Abe's cabinet approved on Thursday a record fiscal 2016 budget that counts on higher growth and tax revenue to achieve Abe's aim of reviving the economy and reining in public debt. ID:nL3N14D1AJ

Minutes of the Bank of Japan's November rate review released earlier in the session showed that many policymakers complained of slow wage and capital expenditure growth, but were optimistic that companies will start to boost spending once emerging economies improve. ID:nT9N0SP00R

Spot gold XAU= rose 0.3 percent to $1,073.60 an ounce.

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