Europe midday: Defence stocks, miners in focus as Stoxx jumps

(Sharecast News) - European markets surged to a new intra-day high at the open on Monday as investors assessed the impact of the US government's effective takeover of Venezuela after the extraordinary rendition of the country's leader Nicolas Maduro. The pan-regional Stoxx 600 came within a whisker of breaching 600 points when it hit 599.66 in early trade. At 1202 GMT it was up 0.35% to 598.28.

Commodities prices were in focus after the US assault on Venezuela and US President Donald Trump's assertion that America and its energy companies were now running the owner of the world's largest oil reserves.

Oil prices slipped on the news, with Brent crude down 0.89% to $60.21 a barrel.

"The immediate price reaction isn't quite as extreme as some may have thought. That's because Venezuela may have the world's biggest reserves, but it's only pumping roughly 1 million barrels a day (under 1% of global output), so the short‑term barrel maths doesn't scream 'crisis'," said Hargreaves Lansdown analyst Matt Britzman.

"The real market-moving question is the medium-term impact. If sanctions ease and serious investment flows back into creaking infrastructure, Venezuela could eventually add meaningful supply, but this won't be a quick process."

Gold climbed more than 2% to breach $4,420 an ounce, as investors sought a safe haven from geopolitical volatility after Trump also threatened other countries in the region, notably Cuba and Colombia, along with Iran where protestors were out in force over the cost of living.

On the equities front, defence stocks rallied on the back of global tensions with Rheinmetall, Renk, Leonardo, BAE, Dassault and Saab up.

Johnson Matthey shot higher on Monday after Berenberg upgraded the shares to 'buy' from 'hold' as it highlighted the stock's correlation with precious metal proxies and potential for consensus earnings upgrades.

Gold miner Fresnillo was also higher on the precious metal's price spike.

Reporting by Frank Prenesti for Sharecast.com