- European Stocks Falter on Oil Slump; Pound Slides
A slump in crude weighed on energy shares as global equity markets headed for a lower finish to the week. The British pound slid.
Stocks from Tokyo to Europe fell, dragged down by oil producers. Crude headed for a weekly loss after falling the most in three weeks on Thursday as OPEC’s move to prolong supply cuts for nine months disappointed investors hoping for more. European carmakers dropped after President Donald Trump reportedly chided German producers for contributing to a lopsided trade surplus with the U.S. The pound fell as a poll showed U.K. Prime Minister Theresa May losing ground to her main opponent ahead of next month’s election. Gold was poised for a third week of gains.
“Markets ultimately found the renewed deal among OPEC and friends underwhelming,” Cole Akeson, a strategist at Sberbank CIB in Moscow, wrote in an emailed note. “Essentially, the market consensus seems to have come around to a view that regardless of what effect on global inventories the deal may have for now, OPEC and its partners have little insight as to what to do later on.”
Before this week’s deal, oil had climbed above back $51 a barrel after Saudi Arabia and non-OPEC member Russia rallied support from the Organization of Petroleum Exporting Countries and other nations to extend the supply pact into 2018. In Vienna this week, OPEC left the market guessing about its exit strategy.
The British pound dropped after a poll showed the Conservative party lead narrowed after the Manchester attack, and as investors in Asia sold the currency after U.K.’s first-quarter economic growth missed estimates. The poll results come less than two weeks before the June 8 general election.
Trading volumes may be lower than normal in some markets Friday as investors approach the long weekend in the U.S. and the U.K., both of which have holidays on Monday.
