LONDON/MILAN: European shares steadied on Monday after a weak open, with oil stocks weighing on the market as crude prices tumbled after a meeting by major exporters in Doha collapsed without a deal to freeze output.
The STOXX Europe Oil and Gas index slipped 0.8 percent, making it the top sectoral loser. Shares in Royal Dutch Shell, Total and Eni were all down nearly 2 percent.
A deal to freeze oil output by OPEC and non-OPEC producers fell apart on Sunday after Saudi Arabia demanded that Iran join in despite calls on Riyadh to save the agreement and help prop up crude prices.
The pan-European FTSEurofirst 300 index touched its lowest intraday level since Wednesday, before turning higher to trade flat at 1,350.95, following U.S. shares up in afternoon trade.
The index remains over 13 percent off of lows hit in February, after concerns over a slump in oil prices and China's growth knocked European stocks back nearly 20 percent in the first few weeks of the year.
"Although we reacted to the downside on the news yesterday, the broader market has recovered," said Atif Latif, director of Guardian Stockbrokers, referring to the OPEC meeting.
"The overall market is starting to absorb this news more easily than we have seen over the last few months, despite volatility in oil and oil and gas shares."
The rise up from the day's lows was aided by stocks that benefit from a low oil price.
Travel and leisure stocks rose 0.6 percent, helped by the fall in crude prices as oil is a major input cost for airlines and tour operators.
Travel operator TUI was the leading gainer in the sector. It was last up 3.2 percent after Berenberg upgraded the stock to buy from hold.
"TUI continues to deliver a superior performance within its tour operation business. This is reflected in a stronger top-line evolution and also it has had a superior cash generation for shareholders," analysts at Berenberg said in a note.
Auto stocks also rose, led by a 2 percent rise in BMW after Goldman Sachs upgraded its rating on the stock to "buy" from "sell".
Spain's Caixabank tumbled 3.4 percent, the top individual faller on the FTSEurofirst 300, after it said it was making a fresh takeover offer worth around $1 billion for the 56 percent of Portuguese lender Banco BPI that it does not already own.
Chipmakers such as ARM Holdings and Dialog Semiconductor fell 3 and 3.5 percent respectively. Traders linked the drop to a report in the Nikkei business daily saying that tech giant Apple will continue its reduced production of iPhones in light of sluggish sales.
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