European stocks higher as oil rallies, VW shares rally – CNBC

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European stocks extended gains on Monday amid a rebound in oil prices and as investors digested the latest data from China.

The pan-European STOXX 600 was up 1.26 percent. Shares of Volkswagen led the gains, up 2.8 percent, after activist investor TCI called for the German carmaker to overhaul its “excessive” executive pay scheme to help boost profits.

Oil markets were also in focus as prices rallied 2 percent at the start of Asia’s trading session on supply outages in Canada where wildfires shut half of the country’s vast oil sands output over the weekend, Reuters reported.

Oil market watchers were also mulling Saudi Arabia’s decision to replace its long-time oil minister Ali al-Naimi with Khalid al-Falih, the chairman of Saudi Aramco, in a move analysts said signaled a new era for crude markets and appeared to be a reaffirmation of Saudi policy to let oil set its own price.

The oil and gas sector was broadly lower however. But Tullow Oil was trading higher after Barclays raised its price target for the stock.

Elsewhere in the sector, French oil firm Total announced plans to buy battery maker Saft for 36.5 euros per share, valuing the firm at 950 million euros. Shares of Total were flat.

And Royal Dutch Shell was forced to evacuate staff form its Eja OML 79 production facility in the Niger Delta region amid fears of attack from militant groups, Vanguard news website reported.

“We continue to monitor the security situation in our operating areas in the Niger Delta and are taking all possible steps to ensure the safety of staff and contractors. We do not wish to go into details. Our operations are continuing.” Shares of Shell were slightly lower.

Asian stocks fell on Monday amid the rally in oil prices and as investors digested the latest weak trade data from China that was released on Sunday. Exports contracted by 1.8 percent from a year earlier to $172.7 billion, falling back into negative territory after March’s temporary burst of 11.5 percent growth, customs data showed Sunday.

Mainland China markets saw the biggest declines on Monday with the Shanghai composite down 2.23 percent, while the Shenzhen composite sagged 2.94 percent.

The soft data weighed on metal prices on Monday and hit stocks in the mining sector. Anglo American shares were over 4 percent lower with other major firms in negative territory.

Arcelormittal was in the red despite Deutsche Bank raising its price target for the stock. And Glencore was also sharply lower after Citigroup cut its price target for the stock.

Global investors were also digesting the latest non-farm payrolls report from the U.S. on Friday which showed a decline in the headline job figure to 160,000. The payrolls number could also influence the U.S. Federal Reserve’s decision on whether to raise interest rates in June.

The Italian banks were under pressure on Monday. Banco Popolare shares were trading sharply lower after its shareholders approved a 1 billion euro capital increase which is expected to be completed by the end of June.

UniCredit was also in the red after the FT cited a top 10 shareholder as saying that the lender “needs more capital and it cannot do that with the current management as they have lost the confidence of the market”.

And JPMorgan cut its price target for Banca Monte dei Paschi di Siena shares, sending them lower.

Shares of security firm G4S were up over 7 percent after reporting a 4.5 percent year-on-year rise in first quarter revenues.

Easyjet was another top performer in early trade after RBC raised its outlook on the stock from “underperform” to “outperform”.

European investors will be keeping an eye on the latest developments between Greece and its international lenders on Monday as the Eurogroup of euro zone finance ministers meets at 2:00 p.m. London time to discuss a delay to the conclusion of a review of Greece’s progress on reforms and fiscal targets.

Amid protests in Athens and Thessaloniki, the Greek parliament approved a controversial package of pension and tax reforms early on Monday in order to meet fiscal targets agreed with lenders in return for a third bailout of 86 billion euros ($98.1 billion). By voting through the measures, Greece hopes a tranche of much-needed aid from the bailout will be released.

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