European stocks rose Friday as oil prices slipped below $100 a barrel, following news reports of an Indian tanker’s passage from the Strait of Hormuz, a key shipping artery that’s been effectively shut amid the Iran war.
The Stoxx Europe 600 was up 0.1% as of 12:25 p.m. in London, reversing earlier losses. The moves followed oil’s decline to just above $99 a barrel. India is said to have been in talks with Iran to secure the safe passage of more than 20 tankers, with news reports suggesting Iran had permitted India-flagged vessels to pass through the Strait.
The decline in the oil price also knocked bond yields lower and helped financials erase some of their earlier losses. However, defensives such as utilities and health care continued to outperform, while miners and consumer names stayed under pressure.
Among individual movers, BE Semiconductor Industries NV shares surged as much as 14% on a Reuters report that the semiconductor equipment firm is fielding takeover interest. Zalando rose as much as 9% after an upgrade from Bernstein. To the downside, Vivendi SE fell after revenue missed forecasts, while housebuilder Berkeley Group Holdings Plc dropped after warning the conflict was “weighing heavily on risk sentiment.”
European equities outperformed their US peers in the first two months of the year, amid optimism about fiscal spending and lower interest rates, but fears of a stagflation shock from the Iran war has weighed them down in March. European stock funds suffered their first outflow in six weeks at $200 million in the week through Wednesday, according to EPFR Global data cited by Bank of America Corp.
Meanwhiile, Germany’s DAX has produced a higher number of days with moves of 1% in either direction over the past month, adding a 10-day on Friday before paring the decline.
