Stock markets across Europe are surging at the open on Thursday after a surprise production cut agreement from OPEC pushed oil prices higher.
Europe’s major indices popped over 1% at the open on Thursday, but have since pulled back slightly.
Mike van Dulken, head of research at Accendo Markets, says in an emailed statement: “The positive open comes almost entirely courtesy of last night’s surprise OPEC production cut agreement. The news sent oil prices sharply higher and has helped Energy names overnight while buoying sentiment in the general commodity space.”
Shell is up over 5%, the top riser on the FTSE 100, while miner Anglo American is just behind, also clocking a rise of more than 5%. BP and miner BHP Billiton are both up more than 4%.
OPEC — the Organisation of the Petroleum Exporting Countries — overnight agreed to cap oil production at a range of 32.5-33.0 million barrels per day, reversing the two-year policy of lead member Saudi Arabia of pumping out as much oil as it could.
The news sent oil prices jumping as much as 6% and has had a knock-on effect for stock markets. Here’s how the FTSE 100 looks:
And here’s how Europe’s other major stock markets look at around 8.20 a.m. BST (3.20 a.m. ET):
Aside from energy and commodity stocks rising on Thursday morning, Deutsche Bank is a notable climber. The German lender is enjoying its second day of positive gains, after a torrid week that saw shares fall to multi-decade lows amid talks of a government bailout.
Whether the rally is a “dead cat bounce” — where shares rise simply because they have fallen so low that traders think there must be some value there — or the troubled lender has turned a corner remains to be seen.
Elsewhere, outsourcing and professional services company Capita is a notable faller, down 20% on the FTSE 100 after a profit warning.
Capita said in a trading update on Thursday morning that profits for the year are set to be between £535 million and £555 million, down from previous expectations of £613 million. The company blames “continued delays in decision making” among clients, likely due to Brexit.