Gains by European stocks are held back by a halt in the oil price rally, which followed indications of an agreement by leading producers to freeze output. As Joel Flynn reports, worries about the global economic outlook linger on.
The week had started with a sense of optimism for markets - a rarity in 2016, so far dominated by turmoil and bad news. European stocks had seen a rally, and are still on course for their best week since January 2015. But concerns about the global economic outlook remain, especially when it comes to the oversupply of oil. The agreement on Tuesday between Saudi Arabia and Russia to freeze oil production was initially welcomed by investors. But just days later, reality is being pumped back into view. IG's Alistair McCaig. SOUNDBITE: IG Market Analyst, Alistair McCaig, saying (English): "I think the positives that could be taken are the fact that they've actually had discussions, but there need to be considerably more of those and considerably more constructive, in order to tackle the current oil crisis." The agreement still keeps production at January's record highs. It's also conditional on other big producers following suit - something Iran and Iraq look increasingly unlikely to do. Brent crude is now just 50 cents from where it was last week, at around 34 dollars a barrel. But it's wasn't all bad news in early trade, said Bader Bank's Robert Halver. SOUNDBITE: Baader Bank Head Of Capital Markets Analysis, Robert Halver, saying (German): "The DAX is doing very well. The crises we had, or at least some of them, are not as serious anymore. The oil price stabilised, the stock market in China also stabilised so the Chinese economy is no longer the big topic." Sterling was soft against the euro while a deal on Britain's membership of the EU remained elusive. German bund yields were sent below 0.2 percent. And the Japanese yen was pushed to a two and a half year high against the euro as investors avoided risky assets.