European Markets Rise As Oil Prices Fall On IEA Demand Cut

(RTTNews) - European markets closed on a firm note on Friday as oil prices fell sharply on International Energy Agency's downward revision in global oil demand forecast for the year and prospects of Gulf foreign ministers securing support from their Iranian counterpart for a temporary arrangement to manage shipping through the Strait of Hormuz.

The IEA now expects world oil demand to drop by 2.5 million barrels per day this year, compared to its previous forecast of a 1.6 million bpd decline. The agency expects oil supply to decline by 5.7 million bpd this year.

Brent crude futures fell to $103.50, losing nearly 3.5%. Despite recovering some lost ground subsequently, still remained sharply lower than previous close.

The pan European Stoxx 600 gained 0.49%. The U.K.'s FTSE 100 ended with a gain of 0.39%, while Germany's DAX and France's CAC 40 climbed 0.82% and 0.78%, respectively. Switzerland's SMI finished with a gain of 0.26%.

Among other markets in Europe, Austria, Belgium, Finland, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Türkiye closed higher.

Czech Republic, Denmark, Iceland and Russia ended weak.

In the UK market, Natwest Group, Barclays, Lloyds Banking Group, HSBC Holdings and Standard Chartered gained 1.2%-2.2%.

Lion Finance, Endeavour Mining, Fresnillo, IAG, Computacenter, Rolls-Royce Holdings, Informa, Howden Joinery Group, Investec, Weir, Halma, Diploma, IMI and Hiscox climbed 1%-2.3%.

LSEG tumbled 3.2%. The Sage Group dropped about 2.2%. Smith & Nephew, Next, BAE Systems, JD Sports Fashion, Reckitt Benckiser, Burberry Group, Rentokil Initial and Tritax Big Box REIT lost 1%-1.7%.

In the German market, Infineon jumped 5%. Deutsche Telekom, Siemens and Siemens Energy gained about 2.5%. Hochtief, MTU Aero Engines, Commerzbank, Daimler Truck Holding, Munich RE and Vonovia also closed notably higher.

Rheinmetall, BASF, Henkel, Deutsche Boerse, Brenntag and Bayer ended weak.

In the French market, Stellantis moved up more than 3%. Safran, Renault, LVMH, STMicroelectronics, Kering, Airbus, Legrand, Capgemini, Schneider Electric, L'Oreal, Societe Generale and BNP Paribas gained 1%-2.5%.

Carrefour, Engie and Edenred ended down by 1.1%-1.5%.

In economic news, Data from the government showed UK's GDP grew 0.4% in July, following an increase of 0.3% in June and no growth in May. GDP was expected to remain flat in July.

The dominant service sector expanded 0.4% and construction output grew 0.1% in July. Industrial production moved up unexpectedly by 0.2%, offsetting June's 0.2% decrease. Economists had forecast output to shrink 0.2%.

On a yearly basis, GDP climbed 1.6% in July compared to forecast of 1.2%.

In the three months to July, GDP gained 0.4%, the same pace of expansion as seen in the three months to June. The economy was expected to grow 0.3%.

A separate ONS report showed that the visible trade deficit narrowed to GBP 20.96 billion in July from GBP 23.0 billion in June. At the same time, the surplus on services trade remained broadly unchanged at GBP 17.5 billion.

As a result, the total trade deficit declined to GBP 3.45 billion from GBP 5.54 billion in the previous month.