European equities opened broadly flat on Tuesday, failing to pick up steam from a global rally in stocks that saw Asia equities near a decade high after three of the biggest equity gauges on Wall Street hit record closes overnight.
Energy companies, which had helped underpin gains in the US, were higher with the S&P/ASX energy index closing up 0.6 per cent in Sydney. That came even amid a slight cooling of the latest oil price rally spurred by clashes in Iraqi Kurdistan.
“We believe energy equities will continue to outperform as the Q3 earnings season is likely to show that cost-cutting efforts are paying off and companies are able to pay their dividends at the current oil price,” said analysts at Credit Suisse.
In Europe, the Stoxx 600 edged up 0.1 per cent higher while the UK’s FTSE 100 and Germany’s DAX were off slightly.
The broadly stronger commodities market saw Sydney’s equities benchmark rise to a more than five-month high on Tuesday as the country’s major mining groups rallied.
The S&P/ASX 200 index finished trading up 0.7 per cent at the highest level since May as
Rio Tinto hit a near-five-year high on improved iron ore shipments. The mining group’s shares closed up 1.3 per cent, as did its rival BHP Billiton.
Oil prices gave up some of their earlier gains, with the price of West Texas Intermediate down 0.3 per cent at $51.70 a barrel, while Brent crude, the international benchmark, was off 0.2 per cent at $57.69.
Oil on Monday touched its highest level since late September after conflict broke out between Iraqi and Kurdish forces near the oil-rich city of Kirkuk, following the Kurdistan Regional Government’s independence referendum last month. Oil has posted strong gains in the second half of 2017, with Brent crude having traded lower than $45 in June.
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