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* STOXX 600 index ends little changed
* OPEC deal boosts energy shares, drugmakers down
* Commerzbank top DAX loser after dividend halt
* Capita sinks after profit warning
By Danilo Masoni and Atul Prakash
LONDON, Sept 29 European shares ended flat on
Thursday as losses among drugmakers offset energy share gains
following an OPEC deal to cut output, while Commerzbank
slid after the German lender froze dividend payments.
The European oil and gas index soared 4.3 percent,
making its best day in seven months. Tullow Oil jumped
9.8 percent, while heavyweights Royal Dutch Shell,
Total and Eni were up 4.2-6.6 percent.
The Organization of the Petroleum Exporting Countries (OPEC)
agreed on Wednesday to cut output to 32.5-33.0 million barrels
per day from around 33.5 million barrels, estimated by Reuters
to be the output level in August.
Ronny Claeys, senior strategist at KBC Asset Management,
said the OPEC agreement was good news for oil companies, which
could now outperform over the next six months.
But some investors questioned the effectiveness of the deal
and crude prices pulled back on Thursday after posting a strong
rally in the previous session on the back of the deal.
"The market reaction to the OPEC deal was overdone. Crude
prices are stuck in a range and with OPEC representing less than
40 percent of global output, crude prices can rise but not that
much," said Marco Vailati, head of research and investment at
Cassa Lombarda in Milan.
The pan-European STOXX 600 ended flat after rising
as much as 1.1 percent earlier in the session, dragged back down
by weakness in drugmakers and travel stocks.
Vailati said he expected European equities to continue
"Europe companies are expensive and earnings growth is
sluggish but on the other hand there is support from the central
bank, which is flooding the market with liquidity," he said.
Commerzbank fell 3.1 percent, the heaviest faller
on the DAX after the German lender said it would cut more than a
fifth of its workforce and suspended its dividend.
But Markus Huber, trader at City of London Markets, said the
harsh measures could help restore investor confidence.
"Although this step is painful, it is necessary in order for
things to finally turn around for Commerzbank. Also, this
combined with laying off close to 10,000 people seems to go a
long way to convincing investors that Commerzbank is ...
committed to turning things around," he said.
Novo Nordisk fell 3.5 percent, touching a
19-month low, after the world's largest insulin maker said it
was cutting jobs as a part of a plan to reduce costs.
Shares in Lufthansa fell 2.7 percent, hurt by
concerns that its plans to boost its low-cost brand would
neither lower costs nor head off larger rivals.
Capita slumped 26.7 percent to a four-year low after
the British outsourcing group cut its full-year profit outlook.
It is the second support services group to warn that clients are
delaying decisions following Britain's vote to leave the EU.
(Editing by Hugh Lawson)