Energy Producers Boost European Stocks After OPEC Output Deal

  • Linde jumps on saying it’s reviewing Praxair proposal
  • RBS falls after failing BOE’s toughest-ever stress test

George Magnus: Unpredictability Interesting, Spooky

A rally in oil-and-gas shares sent European stocks to a second day of gains as OPEC agreed on a deal to cut production for the first time in eight years.

A gauge of energy producers surged the most in two months, following crude higher. OPEC will reduce output to 32.5 million barrels a day, Iran’s oil minister said in Vienna. Tullow Oil Plc jumped 13 percent to a 16-month high, while Saipem SpA rallied 9.6 percent, its biggest gain since April. The Stoxx Europe 600 Index closed 0.3 percent higher, after rising as much as 0.7 percent.

Investors are also awaiting the outcome of Sunday’s Italian referendum on constitutional reform. The FTSE MIB Index climbed 2.2 percent for a second daily advance, after sliding to a two-month low on concerns about political instability should Prime Minister Matteo Renzi lose the vote.

“Oil prices are driving today’s gains,” said Stuart Samuels, a London-based sales trader at Oppenheimer Europe. “I’d be inclined to take some profits. This weekend’s Italian referendum is the larger issue.”

The Stoxx 600 capped its first monthly advance in three, up 0.9 percent. European equities climbed in November on speculation Donald Trump’s U.S. election win will lead to increased fiscal spending. Industries seen benefiting from stronger economic growth -- including miners, banks and insurers -- led gains, while defensive shares such as utilities and telecommunications shares lagged.

Among shares active on corporate news:

  • Linde AG added 4.7 percent after saying it’s reviewing a revised merger proposal from Praxair Inc.
  • Novo Nordisk A/S climbed 3.4 percent after saying its long-acting, once-a-day insulin Tresiba was as safe to the heart as Sanofi’s best-selling drug in a clinical test.
  • RPC Group Plc jumped 7.5 percent after the maker of plastics reported record profitability in the first half of the year and said the second half began well.
  • Royal Bank of Scotland Group Plc lost 1.4 percent after failing multiple hurdles in the Bank of England’s toughest-ever stress test.
  • Airlines shares fell on bets of costlier fuel as oil prices recovered. EasyJet Plc and Air France-KLM Group fell more than 2 percent.
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