Oil stocks help FTSE 100 outperform European peers amid trade tensions
(For a live blog on European stocks, type LIVE/ in an Eikon
* FTSE 100 down 0.1 pct
* Cobham jumps 6 pct on MS upgrade
* Indivior gains as U.S. court blocks generic drug
* Energy stocks stage turnaround
By Helen Reid
LONDON, June 18 (Reuters) - Britain's top stock index fell
on Monday as trade tensions between the United States and China
kept the pressure on equity markets across Europe.
The FTSE 100 was down 0.1 percent by 0840 GMT, at
its lowest since May 30 but substantially outperforming other
European stock markets. Germany's DAX was down 0.8
percent while the STOXX 600 fell 0.5 percent.
The British market was helped by strong financial and energy
stocks, while a weaker pound also boosted the market's mainly
exporting companies. Germany, meanwhile, is home to big autos
stocks which are in the firing line of trade tariffs.
Trump announced hefty tariffs on $50 billion of Chinese
imports on Friday, laying out a list of more than 800
strategically important imports from China that would be subject
to a 25 percent tariff starting on July 6, including cars.
China said it would respond with tariffs "of the same scale
and strength" and that any previous trade deals with Trump were
Oil stocks were the biggest weight but jumped suddenly into
positive territory after a report that OPEC was discussing a
more modest output hike of 600,000 barrels a day boosted crude
Crude was falling earlier after China threatened duties on
American crude imports, while supply from OPEC and Russia was
also expected to rise.
Oil majors BP and Royal Dutch Shell turned
from the biggest drag to the biggest boost to the index, still
however rising only 0.3 to 0.5 percent.
Speculation was rife ahead over what forward production
policy would be decided by the OPEC producer cartel at a meeting
Mid-cap exploration and production firm Premier Oil
fell 2 percent, and oil services firms Petrofac and Wood
Group also fell.
Petrofac declined 1.7 percent as a negative note from Morgan
Stanley also weighed.
Analysts at the broker said the market's focus was on
whether Petrofac had sufficient liquidity to repay the October
$677 million bond in cash or whether additional capital will be
Mining stocks were also a drag on the FTSE as copper prices
slipped to a near two-week low on pressure from a stronger
dollar and as a holiday in China drained buying interest from
Glencore, BHT Billiton and Anglo American
fell 0.9 to 1.4 percent.
In dealmaking news, mid-sized bank CYBG sealed a
deal to acquire Virgin Money for 1.7 billion pounds,
creating Britain's sixth-largest bank by assets in a bid to
challenge the country's top four lenders.
Virgin Money shares initially rose more than 2 percent,
before reversing course to trade down 2.5 percent. CYBG shares
were down 0.8 percent.
Also among mid-caps, Cobham shares jumped 6.2
percent after Morgan Stanley upgraded the defence stock to
"overweight" from "equal-weight".
"We think current management have stabilised performance,
with necessary costs sunk and measures taken to aid operational
delivery," they wrote.
"With multi-year upcycles beginning in core defence and
aerospace markets, and other niche exposures appearing to be at
or close to the bottom, we see consensus underpinned."
Shares in drugmaker Indivior also jumped 5.4
percent after a U.S. court granted a temporary restraining order
blocking Dr Reddy's Laboratories from launching a generic
version of the firm's best-selling opioid addiction treatment.
It was still far from recovering its losses on Friday when
the stock sank 27 percent.
(Reporting by Helen Reid)
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