The arrest of a top Huawei executive hit markets just as investors were starting to question Donald Trump's trade truce deal with his Chinese counterpart Xi Jinping
London (AFP) - European stock markets mostly recovered on Friday, the end of an extremely volatile week, as petroleum-linked shares rose on the OPEC supply cut, sending crude prices soaring.
OPEC and partner countries including Russia agreed to cut oil output by a combined 1.2 million barrels a day, Iraq’s oil minister Thamer Abbas al-Ghadhban told reporters after a meeting in Vienna.
The news sent both Brent North Sea Oil and New York’s WTI surging nearly five percent, after oil prices had fallen by more than 30 percent in two months.
But analyst Stephen Brennock told AFP the oil price outlook remains on the downside “despite today’s knee-jerk reaction.”
“I would describe the cuts as close but not close enough with regards to eliminating the global oil glut. A combined reduction of 1.5 mbpd was needed to avoid a supply surplus in the first half of next year,” said Stephen Brennock, an oil expert for PVM Oil Associates.
London’s FTSE 100 benefited from the oil stock boost closing up 1.28 percent. Paris was also slightly higher, but Frankfurt slumped as investors continue to worry about trade tensions between Washington and Beijing.
Wall Street was also back in sell-off mode over the US-China trade clash and following mixed US jobs data, pushing the Dow down 1.34 percent around 1645 GMT.
The US economy added 155,000 jobs in November, below analyst expectations, while unemployment held steady at 3.7 percent, according to the Department of Labor.
Analysts however said the mixed data may reduce impetus for the US Federal Reserve to keep hiking interest rates, which has been a source of stock market volatility, including on Thursday when the Dow fell almost 800 points at session lows.
In Asia Friday Tokyo closed 0.8 percent higher, Shanghai ended flat and Hong Kong finished down 0.4 percent after a late sell-off.
- Uncertainty over China deal -
There remains however a general mood of unease across trading floors, just days after the euphoria of US President Donald Trump’s tariffs ceasefire deal with Chinese counterpart Xi Jinping at the G20 that put the row off for 90 days while they try to resolve the crisis.
No sooner had the rally from that announcement run its course than questions began to be raised about the details and whether the world’s top two economies could actually resolve their differences.
That was compounded by news that a top executive at Chinese telecoms giant Huawei had been arrested in Canada and faces extradition to the United States over allegations the firm had broken sanctions linked to Iran.
The arrest of Meng Wanzhou fuelled concerns about already fraught relations between Washington and Beijing and the future of the trade talks.
“The market is kind of falling back into our interpretation of where we are in the US-China trade war,” said Art Hogan, chief market strategist at B. Riley FBR.
The Huawei arrest has dampened expectations that the US and China could quickly hash out a deal, Hogan added.
- Key figures around 1645 GMT -
London - FTSE 100: UP 1.28 percent at 6,789.74 points (close)
Frankfurt - DAX 30: DOWN 0.21 percent at 10,788.09 (close)
Paris - CAC 40: UP 0.68 percent at 4,813.13 (close)
EURO STOXX 50: UP 0.43 percent at 3,059.17
New York - Dow Jones: DOWN 1.34 percent at 24,613.30
Tokyo - Nikkei 225: UP 0.8 percent at 21,678.68 (close)
Hong Kong - Hang Seng: DOWN 0.4 percent at 26,063.76 (close)
Shanghai - Composite: FLAT at 2,605.89 (close)
Euro/dollar: UP at $1.1395 from $1.1381 at 2130 GMT
Dollar/yen: DOWN at 112.57 yen from 112.69
Pound/dollar: DOWN at $1.2752 from $1.2783
Oil - Brent Crude: UP $2.74 at $62.80 per barrel
Oil - West Texas Intermediate UP $2.07 at $53.56