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08 Mar 2021 | 11:44

Europe midday: Shares hold gains as oil price rises; Travel stocks in favour

(Sharecast News) - European shares maintained gains at midday oil stocks up on reports of an attack on Saudi oil facilities on Sunday, while travel and leisure shares were also in favour. The pan-European STOXX 600 index was up 0.89%, with all major regional bourses were up, although inflationary fears hit US futures, with a lower opening indicated.

Brent crude moved above $70 a barrel after Saudi officials said a drone attack from the sea by Yemeni Houthi rebels on a petroleum storage tank at the Ras Tanura shipping port on Sunday morning.

Saudi Arabia's ministry of energy said the attacks had not resulted in any injury or loss of life or property. Share in oil majors rose, with BP, BHP, Total and Shell all higher

"Unfortunately while rising crude prices do highlight a growing optimism over demand levels, this continued ascent in energy prices do elevate inflation expectations going forward," said IG analyst Joshua Mahony.

"Inflation is going to be a key determinant of central bank expectations, and (Federal Reserve chairman) Jerome Powell has admitted that the bank has to act if prices get out of control."

"With OPEC deciding against a production hike, there is clearly a desire to continue driving prices higher as we move towards the one-year anniversary of the historic 2020 April crude collapse."

In other equity news, UK education publisher Pearson fell rebounded from a 5% slump in morning trade to be a major gainer as investors digested a fall in 2020 revenue and adjusted operating profit and restructure of the business to focus on a direct-to-consumer model.

Travel and leisure-related stocks also gained with engine maker Rolls-Royce, British Airways parent IAG, InterContinental Hotels and Premier Inn owner Whitbread all higher. Cruiser operator Carnival, TUI, easyJet and Cineworld were also higher.

Micro Focus shares fell as the company planned to appeal a jury ruling in favour of US-based Wapp in a patent litigation case, awarding the claimant damages of up to $172.5m.

BT Group was also in the red after the telecoms company denied accusations that former chairman Jan du Plessis was forced out last week because he was holding up the pace of strategic decisions. BT was forced to issue a statement on Monday after reports last week that chief executive Philip Jansen threatened to leave unless du Plessis was replaced.
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