European and US markets head higher buoyed by oil

·2 min read
European and US markets head higher buoyed by oil
Oil prices headed to new multi-year highs on Tuesday. Photo: Getty

European markets ticked up on Tuesday in London, receiving a boost from the energy sector as oil prices headed to new, multi-year highs. 

The gains come following the Organization of the Petroleum Exporting Countries and allies led by Russia (OPEC+) making the decision to continue increasing output only gradually, despite the recovery of demand as COVID cases appear to be waning. 

Caseloads of the virus headed to two-month lows on Monday, data showed. 

The moves by OPEC+ came contrary to requests for higher production, in order to lower prices, by countries such as the US and India. 

By the afternoon, crude oil (CL=F) was trading at $79.06 per barrel. Brent crude futures (BZ=F) had also moved to $82.72 per barrel. 

The FTSE 100 (^FTSE) was up 0.9% by the close. Meanwhile Germany's DAX (^GDAXI) was up 1.1% and France's CAC (^FCHI) headed 1.5% higher. 

Read more: Rishi Sunak: UK COVID recovery 'comes at a cost'

US stocks headed higher after a day of heavy selling. The S&P 500 (^GSPC) and the Dow (^DJI) were up 1.3% and 1.2% respectively by the close. The Nasdaq (^IXIC) rebounded 1.4% following losses of 2.1%. The S&P had closed yesterday at its lowest point since late-July.

Indices had been dragged down by losses from some of the US's biggest tech names, including Facebook (FB), Amazon (AMZN), Apple (AAPL) and Microsoft (MSFT). 

"US fiscal policy encompassing the debt ceiling and the soon to be trimmed $3.5tn (£2.57tn) spending plan [is] fraying nerves, although oddly, US yields edged higher overnight," said Jeffrey Halley, senior market analyst for Asia Pacific at OANDA.

"Non-transient inflation leading to interest rate rises bashed technology stocks overnight as well, although I’d argue the world being long to the gunnels of them since March 2020 is probably the underlying driver."

Japan's Nikkei (^N225) continued its downward trajectory in last night's session, declining 2.2%. Investors have been underwhelmed by the country's new government, pushing the index to a seventh-daily loss. Tuesday's session capped its worst longest losing streak since May 2019. 

Meanwhile, there was some reprieve for stocks in Hong Kong. The Hang Seng (^HSI) was up 0.2%. 

Markets in mainland China remained closed for the holiday.

Watch: Oil prices peak at highest levels in nearly 3 years

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