European energy stocks gain on oil price
European energy stocks climbed as crude oil prices rose. Gains by BP Plc and Total SA failed to lift indexes as investors waited for a U.S. Federal Reserve decision on interest rates this week. “Energy stocks continue to benefit from capacity issues,'' said Richard Robinson, a Jersey-based fund manager at Ashburton Ltd., which oversees the equivalent of $1.8 billion. “If the Fed is going to continue raising rates, the risk is that earnings may suffer.''
The Dow Jones Stoxx 600 Index was little changed at 312.51 at 10:52 a.m. in London. The Stoxx 50 rose 0.2%, while the Euro Stoxx 50, a measure for the countries using the euro, gained 0.1%. Markets pared earlier gains after European Central Bank council member Nicholas Garganas said the bank is ready to accelerate the pace of interest-rate increases to counter higher inflation risks in the dozen nations sharing the euro. The Stoxx 600 has lost 7% this quarter on concern that interest-rate increases will limit economic growth and corporate profits. National benchmarks rose in 13 of the 17 western European markets that were open. France's CAC 40 rose 0.3%. The U.K.'s FTSE 100 gained 0.2% as did Germany's DAX.
U.S. policy makers are scheduled to announce their next rate decision on June 29. Economists surveyed by Bloomberg expect a 17th straight increase to 5.25%. The central bank lifted borrowing costs at its last meeting in May. “There's been a lot of hesitation in the market,'' said Philippe Brossard, head of research at Euler Hermes in Paris. “The stock market is anticipating two rate increases and maybe more.''
Crude oil rose above $72 a barrel in New York for the first time in two weeks on speculation an increase in gasoline demand will drain U.S. fuel stockpiles. BP, Europe's largest energy company, rose 1% to 615.5 pence. Total SA, Europe's largest refiner, climbed 1% to 49.79 euros.
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