European Stocks Lifted by Shell Deal

By Tommy Stubbington 

        European stocks inched to a 15-year high Wednesday, buoyed by a sharp rise in oil and gas shares as investors bet Royal Dutch Shell's deal to buy BG Group will spark a wave of mergers in the industry.
        Oil and gas companies on the Stoxx Europe 600 index surged 5.5% in early trade after oil giant Shell confirmed it has agreed to buy BG for GBP47 billion ($69.6 billion).
        The Stoxx Europe 600 as a whole was 0.2% higher, having closed at its highest level since late 2000 on Tuesday. The index has gained 18% so far this year as the European Central Bank's stimulus program pushes a wave of cash into equity markets and investors latch on to signs the eurozone economy is slowly improving.
        Until Wednesday, the energy sector had largely lagged behind the move, following the collapse in oil prices in the second half of last year.
        "The [Shell] deal could provide a further fillip to the market whereby companies are prepared to deploy cash on investments in which they see considerable future prospects. In terms of the energy sector itself, the deal could also prompt other companies who have been running the slide rule over potential targets to make their move," said Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers.
        The U.K.'s energy-heavy FTSE 100 index climbed 0.6%, led by a 38% rise in BG shares. Shell's peer BP also rose sharply, adding 4.1%.
        Elsewhere, Germany's DAX fell 0.2% and France's CAC 40 climbed 0.1%.
        In currency markets, the euro strengthened 0.4% against the dollar to $1.0861. The single currency has steadied after plunging to a 12-year low last month.
        The pound also rose 0.4% against the buck to $1.4883.
        In commodities markets, Brent crude oil was 1.3% lower at $58.36 a barrel, slipping back from big gains earlier in the week. Gold was steady at $1,210.90 an ounce.
        Write to Tommy Stubbington at tommy.stubbington@wsj.com
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        (END) Dow Jones Newswires

        April 08, 2015 04:22 ET (08:22 GMT)

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