LONDON – The Latest on global financial markets (all times local):
European stocks have closed sharply higher, seemingly encouraged by a rally in the price of oil.
Germany’s DAX stock index ended the day 2.7 per cent higher at 9,377.21 while Britain’s FTSE 100 rose 2.9 per cent to 6,030.32. France’s CAC 40 closed 3 per cent higher at 4,233.47, helped also by a rise in its banking stocks.
Stocks have been tracking the price of oil, in part because it is viewed as a gauge of the health of the world economy as a measure of demand for energy. On Wednesday, the U.S. benchmark for oil was up a sharp 6 per cent at $30.83. Talks are ongoing among major crude producers on whether to freeze their output levels, with Iran reluctant to agree.
The price of oil is edging up as major crude producing countries discuss a potential output freeze with skeptic Iran.
Four nations, including Russia and Saudi Arabia, agreed on Tuesday to freeze their output levels if other producers do the same. Iran has so far rejected the notion, but more talks were ongoing in Tehran on Wednesday.
As the negotiations proceeded, the benchmark crude oil contract traded in New York was up 65 cents to $29.69 a barrel. Brent, the international oil benchmark rose 86 cents to $33.70.
European stock markets are being led higher by mining and bank stocks, particularly Credit Agricole, which announced a restructuring program.
France’s CAC 40 index was up 1.6 per cent, with Credit Agricole jumping 11.5 per cent after the bank reported a rise in fourth quarter net profit and said it would strengthen its finances by reducing its exposure to regional banks.
Shares in Spanish lender Bankia were up 4.5 per cent after it said it will pay back thousands of small shareholders the money they invested in the bank when it was floated in 2011, a year before it had to be bailed out. The bank will make a provision of 1.8 billion euros ($2 billion) for the costs, but the move decreases uncertainty over its legal exposure.
Elsewhere, Germany’s DAX was up 1.5 per cent while Britain’s FTSE 100 rose 1.3 per cent, helped by an 8.6 per cent rise in commodities producer Glencore plc.