Europe mixed as Thanksgiving quietens trade

London’s blue-chip equities are moving around the flatline today as the US holiday liquidity dampener moves into effect. 

Canary Wharf
Source: Bloomberg

Petrofac (-2%) remains out of favour as the new normal of lower oil prices continues to bite; it could be one of the equity movers when OPEC give us its full view this afternoon.

Royal Mail (-1.3%) has lost its pay-out attraction, and BG Group (-1.3%) is coming under fire from the government and shareholders as the new CEO’s pay deal continues to gather negative headlines.

In the FTSE 250 we have Stagecoach (+6%) racing ahead this morning. The transport operator has signed an eight-year joint deal with Virgin to run the East Coast Main Line, taking over from none other than the taxpayer, which actually gives them a tough act to follow. Good news for Stagecoach shareholders as it pips a number of other firms to the contract; the shares have nudged above £4 in early trading, its highest level this century. Long term it will be hoping that the government’s changes to the bidding process, after the West Coast Main Line fiasco, mean this deal is worth the paper it is written on.

In the absence of US markets, the week’s biggest event risk comes today as OPEC members discuss their plight in Vienna. Yesterday the Gulf contingent agreed they were happy with their production levels in the face of plummeting crude prices. This morning we have more mixed signals, and oil prices have slid another $1.50 since Europe went to work.

The sheer magnitude of the moves in oil recently have led many analysts to expect a cut to supply, as global growth concerns added to increased US production, and the rise of other hydrocarbons like shale gas pressurise the demand for traditional black gold. Failure to cut supply today will lead to further downward pressure on Brent and Nymex.

Expect snippets throughout the day as reporters attempt to doorstep various spokespeople at the meeting, while the press conference at 3pm (London time) will give us the full run down. Traders should be weary of potential market moves in the run up, as there is no defined data release time like a central bank meeting, hence we may get news before the press conference.

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