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Energy Sector Leads European Shares Higher12-27-17 4:21 AM EST
By Kenan Machado and Riva Gold 
   -- Oil steady near 2 1/2 year high 
 
   -- China stocks move lower 
 
   -- World's biggest shipbuilder has worst day on record 

Energy and mining companies led a small advance in European stocks Wednesday after oil prices reached their highest since 2015, although market moves and volumes were muted in the quiet period between the Christmas and New Year's holidays.

The Stoxx Europe 600 edged up 0.2% in the early minutes of trading as markets reopened for the first time since Friday, led by gains in the oil-and-gas and basic resources sectors.

U.S. crude futures briefly popped above $60 a barrel on Tuesday after a pipeline explosion in Libya, before edging down 0.2% Wednesday to $59.79 a barrel. The incident is expected to reduce oil production there by up to 100,000 barrels a day, the country's National Oil Co. said on its website.

Every company in the Stoxx Europe 600's oil-and-gas sector traded higher Wednesday, with shares of Italian oil-and-gas contractor Saipem leading gains with a 3.1% climb after it said late Friday it had signed several contracts for onshore and offshore projects.

The basic resources sector also rose 0.9%, drawing support from a climb in copper prices, with London-listed futures last up 0.5% at $7,158 a ton.

The euro was last up 0.1% at $1.1871, having fully recovered after a sudden drop on Christmas day during Japanese trading briefly sent it down around 3%. Analysts attributed the move to stressed dollar liquidity amid light holiday volumes.

"This question of tighter [dollar] liquidity could prove a little more long-lived," strategists at Nordea wrote in a note on Wednesday.

Futures pointed to a 0.1% opening rise for the S&P 500. Shares of energy companies had also risen in the U.S. on Tuesday, although wider benchmarks on Wall Street still ended the day lower amid a decline in shares of Apple and some of its suppliers and losses in the financial sector.

In Asian trading, Chinese stocks sold off in the afternoon amid broad declines in many of the blue-chip companies that have done well this year. The Shanghai Composite was recently down 0.9% with insurers faring worst, and the CSI 300--made up of the biggest stocks in both Shanghai and Shenzhen--slid 1.5%.

Smartphone-related companies fell to begin the week, following reports of potential sales weakness for the newest iPhones.

The declines for some tech firms helped offset a rebound in Chinese property developers in Hong Kong, which left the benchmark Hang Seng Index up 0.1% in afternoon trading.

Taiwan's Taiex index finished up 0.6%, as Apple assembler Hon Hai Precision Industry rose 1.1%. Other tech stocks were weaker, however. Largan Precision, a Taiwanese company that makes smartphone lenses, fell nearly 5%, while Sunny Optical, a Hong Kong-listed peer, declined 5.5% after tech-induced declines in the U.S. on Tuesday.

Tech has been the world's best-performing sector this year, so it isn't surprising that there has been a year-end pullback, said Felix Lam, a portfolio manager at BNP Paribas Asset Management.

And while the smartphone supply chain will be under pressure in the seasonally weak first quarter, President Securities said it doesn't see fundamentals deteriorating.

South Korea's Kospi edged up 0.4% as some major tech stocks including Samsung Electronics rebounded and shares of pharmaceutical companies rose. That helped offset a 28% drop for Hyundai Heavy Industries.

Hyundai Heavy, the world's biggest shipbuilder, had its worst day ever after releasing guidance through 2018, announcing a 1.3 trillion won ($1.2 billion) stock-sale plan and saying it would sell part of its refining operation.

Thailand's benchmark surpassed a record high reached in 1994 and Southeast Asia stocks broadly outperformed, in part thanks to the recent gains in crude oil futures.

Japan's Nikkei Stock Average edged up 0.1%.

Yifan Xie and Marc Navarro Gonzalez contributed to this article.

Write to Kenan Machado at kenan.machado@wsj.com and Riva Gold at riva.gold@wsj.com

 

(END) Dow Jones Newswires

December 27, 2017 04:21 ET (09:21 GMT)

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