Energy is now the best performing market sector in Europe

Energy is now Europe’s best-performing sector so far this year, with a 12% gain for the sub-index early Monday, after banking stocks tumbled on the Russia-Ukraine crisis, dragging the one-year banking index. -11 percent date gain.

As tensions over Ukraine have risen in recent days, banking stocks in Europe tumbled early Monday on fears that potential sanctions against Russia over an invasion of Ukraine could hit the European banking sector.

Meanwhile, energy stocks have performed well in recent weeks, helped by rebounding oil prices and majors announcing strong multi-year earnings and cash flow for Q4 2021 and overall. of the year 2021.

Thus, on Monday, the STOXX Europe 600 Banks index fell by 4.6%, according to Bloomberg estimates. Year-to-date, the index has now gained 11%, as of Monday EST.

The STOXX Europe 600 Energy index, for its part, has gained 12.3% since the start of the year.

As international crude oil prices rally to $90+, shares of major European oil companies have also fallen, offsetting the drop in stock prices due to the pandemic.

Europe’s biggest oil companies, Shell, BP and TotalEnergies, have already reversed all of their stock price losses accrued since the start of the pandemic, or are close to doing so, according to Bloomberg estimates.

Big Oil’s spectacular fourth-quarter and 2021 earnings and oil price rally to over $90 a barrel have helped oil majors’ stocks trade higher in recent weeks.

Shell reported net profit of $6.4 billion for the last quarter of 2021 and full-year profit of $19.29 billion, compared to $4.8 billion for 2020, in this which chief executive Ben van Beurden described as a “memorable year”. BP announced last week its highest annual net profit in eight years, and TotalEnergies posted a net profit of $16 billion for 2021, the highest in more than a decade.

By Tsvetana Paraskova for

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Mary I. Bruner