By Dave Morris
European markets struggled for direction on the first session after the long Easter weekend, with gains from oil names after as the U.S. ratcheted up pressure on Iranian crude output. Banks tugged in the other direction.
How are markets performing?
The Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.30% was flat at 390.19, after gaining 0.2% on Thursday, its last session before the Friday to Monday Easter break.
The U.K. pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.0612% bounced back somewhat by 0.2% to $1.3009, having closed Thursday down nearly 0.6%. The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.31% recovered 0.4% to 7,489.6 after falling 0.2% in Thursday’s trading.
What’s moving the markets?
Commodity related stocks rose after the U.S. on Monday said it would cease to allow countries from importing Iranian oil, deciding not to renew waivers, set to terminate May 2, which were granted to countries including China, India and Turkey. The tightened restrictions could take over 1 million barrels of Iranian supply off the market a day, a boost for prices as the White House ratchets up pressure on Tehran following the implementation of sanctions in November.
June Brent crude , the global benchmark, was up 7 cents to $74.21 a barrel, but jumped to nearly six month highs on Monday. West Texas Intermediate crude for June the international benchmark, added 15 cents to $65.60 a barrel.
Brexit news was expected to return to a high pitch after the end of the Easter holidays, with focus turning to plots by rebellious Conservative party members to oust U.K. Prime Minister Theresa May. The Telegraph reported that May has been given until June 12 to step down, or else there may be attempts to change party rules which currently prohibit leadership challenges for a year after one has taken place. May’s last challenge was in December, which she survived.
Which stocks are active?
The change in oil prices following U.S.-Iran oil ban news was the key driver of shares on Tuesday. The winners from the deal included oil majors Royal Dutch Shell /zigman2/quotes/206428183/delayed UK:RDSA +1.75% , which rose 1.8%, and BP PLC , up 2.2%, as well as smaller firms Lundin Petroleum which jumped 5% and Tullow Oil Plc /zigman2/quotes/205079109/delayed UK:TLW +2.79% up around 3%.
By contrast, those hit hardest by the threat of rising fuel costs were the airlines. EasyJet Plc /zigman2/quotes/202825892/delayed UK:EZJ +5.11% was down 3.6%, Air France SA /zigman2/quotes/205396176/delayed FR:AF +5.88% off 6% and Ryanair Holdings Plc /zigman2/quotes/205429530/delayed IE:RY4C +3.00% was down 3.6%.
Barclays Plc was stung by a report in the FT that the U.K. bank would cut bonuses for its investment bankers, sending shares down 1.8% /zigman2/quotes/208409333/delayed UK:BARC +1.95% . The move was seen as part of a broader cost-cutting drive as an assault by activist investor Edward Bramson was expected to reach fever pitch at the bank’s annual meeting on May 2.
The financial sector, as a whole, sagged, with Banco Santander SA /zigman2/quotes/202859081/composite SAN +1.83% /zigman2/quotes/205677933/delayed ES:SAN +3.22% down 1.4% and BNP Paribas SA /zigman2/quotes/206351084/delayed FR:BNP +0.94% losing 1.6%.