Europe close: Oil and gas shares buoy main indices, periphery stocks outperform
By Alexander Bueso
Date: Monday 27 Sep 2021
(Sharecast News) - German shares were in focus on Monday as investors eyed moves to form a coalition after the country's national election saw the chances of a left-wing government fade - but it was oil shares that drove gains.
The DAX index added 0.27% to 15,573.88, leading gains among regional bourses, while the pan-European Stoxx 600 index slipped 0.07% in early trade to 462.42.
Spain's Ibex 35 outperformed, climbing 1.46% to 9,002.90 while the FTSE Mib added 0.63% to 26,132.24 alongside.
Oil and Gas fared best at the sector level, climbing 2.83% to 274.68 as front month Brent crude oil rose 1.63% to $79.34 a barrel on the ICE.
The centre-left Social Democrats are trying to form a government after narrowly winning their first national election since 2005. The party is seeking an alliance with the Greens and the liberal Free Democrats in what has been called the "traffic light" coalition.
Preliminary results showed the Social Democratic Party gaining the largest share of the vote with 25.8%. Angela Merkel's right-leaning bloc of the Christian Democratic Union and Christian Social Union was seen with 24.1% of the vote.
However, coalition negotiations, which could start on Monday, are likely to take weeks or even months.
In the UK, the petrol crisis also forced the government to suspend competition law to help oil companies to work together to deliver fuel to petrol stations that are running dry.
In equity news, Rolls-Royce shares soared to the top of the Stoxx, up 11.31%, after the aerospace engineer won a 30 year £1.9bn contract to supply parts for B-52 US Air Force bombers even as it announced the £1.5bn sale of its Spanish ITP Aero division.
Shares in serviced offices company IWG gained 4.4% on reports it is exploring a multibillion pound break-up that would involve splitting it into several distinct companies.
Spain's Cellnex Telecom slid 4.1% after Citigroup downgraded the stock to 'sell', citing valuation concerns.
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