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European shares got off to a slippery start on Monday as traders reassessed the impact of a failed attempt by major oil producers to agree on a deal to freeze output. This unsuccessful deal sent stock markets in Asia down. Meanwhile, Wall Street was able to swing into positive territory by reversing early losses and brushing off a drop in crude futures as investors digested better-than-expected earnings reports from companies such as Morgan Stanley and Hasbro Inc.
The oil and gas sector led declines in Europe on Monday, following the outcome of a meeting in Doha. The oil producers that supply nearly half the world’s output met on Sunday but failed to reach a deal on output, which markets had been hoping for. This attempt to curb oil production fell apart after Saudi Arabia, one of the top exporters of crude oil, reiterated its demand that neighbours Iran also agree to cap its oil production. Iran has repeatedly rejected that call, arguing that it wants to return production to pre-sanction levels before refining output.
Crude oil lost 1.2% to fall to $39.85 a barrel, and Brent fell 0.2% to $43. Among oil companies in London, shares of Royal Dutch Shell fell 0.75% and BP reversed early losses to end the day 0.06% lower.
On a more optimistic note, airlines and travel operators were on the rise on Monday as they made the most of sliding oil prices to trade in positive territory. EasyJet was one of the biggest gainers, adding 1.66%. British Airways’ parent company, International Consolidated Airlines Group, also did well, rising 0.75%. Shares in TUI and Thomas Cook also added 3.17% and 0.91%, respectively, after Berenberg upgraded the two travel operators from “hold” to a “buy”.
In the financial industry, HSBC Holdings plc reversed huge early declines to end the day trading in positive territory. HSBC stock dropped after news emerged that Chief Executive Officer Stuart Gulliver will leave the bank in two years’ time.
In the meantime, shares in Hasbro leaped 5.29% after the toy maker reported better-than-expected profit and revenue numbers. The company has Disney Princess and Frozen dolls to thank for this.
Shares of Walt Disney Co. surged 2.5% to a new three-month high on Monday. The entertainment giant had its latest film, ‘The Jungle Book’, to thank for this, as the opening weekend for the film dominated the weekend box office, smashing analyst expectations. The box office took in around $103 million in its opening weekend, which was well above the expected $80 million mark. Furthermore, Pivotal upgraded the media giant’s stock to a “buy” from “hold”.
Amazon shares also did well on Monday, gaining 0.8%. The online retailer announced that it is breaking out its video-streaming service in the US as a stand-alone option. Amazon will charge $8.99 for a monthly subscription – a dollar less than Netflix’s more popular plan. This news sent Netflix’s shares down 3.35%.
French cosmetics giant L’Oreal edged higher after the company reported a rise in its first-quarter sales, as the strengthening euro led to higher revenues in emerging markets. During the first three months of 2016, sales totalled €6.55 billion.
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