euro stocks slip on oil
17 June 2008

Dealers said the latest jump took oil, at $139.89, very close to $140 and if that barrier is breached, a further run up to $150 looks likely which will only add to concerns over inflation risks to growth.

In London, the FTSE 100 index was down 0.14 percent at 5794.60 points. In Paris, the Cac 40 shed 0.52 percent to 4657.74 points and in Frankfurt the Dax fell 0.52 percent at 6729.88 points. The Euro Stoxx 50 index of leading eurozone companies lost 0.84 percent. The euro was at 1.5471 dollars. Losses were limited by sharp gains in the banks after third-ranked Barclays said it was considering various options to raise fresh cash to repair its finances in the wake of the global credit crunch. Barclays jumped 3.46 percent to 329 pence but HBOS soared 11.66 percent to 316 percent as investors followed the recovery card.

In Asia, Japanese shares jumped 2.72 percent, Hong Kong rose 1.94 percent but Sydney slipped 0.1 percent. On Wall Street, stocks were down 0.55 percent at around 4.15pm GMT as investors took their lead from oil and worried over what the impact will be on inflation which now looms large on the agenda ahead of concerns about slower growth.

In Paris, stocks slipped back as oil prices rose, undercutting early gains as investors were forced to reconsider news that Eurozone inflation hit a record 3.7 percent in May, jumping from 3.3 percent in April. "Oil is enough to stymie any movement," said one dealer, adding: "So far this month, it is oil which has caused the main problems for the markets. I hope that in due course another theme will come to the fore." Oil major Total rose 0.60 percent to 52.61 euros, limiting the downturn in the Cac 40 on news of a tie-up with China's CNOOC offshore oil and gas operator. Air France-KLM added 0.49 percent to 16.50 euros on the back of a Goldman Sachs note saying the company could be one of the winners as the airline industry is forced to consolidate in the face of soaring fuel costs.

In Frankfurt, it was a similar day. Deutsche Bank lost 0.96 percent to 61.94 euros on concerns about the health of the banking sector in the fallout from the global credit crunch and Lufthansa shed 1.08 percent to 15.55 euros. On the upside, Deutsche Borse jumped 5.07 percent to 83.59 euros after reports that top shareholder Atticus would not sell its holding in the market operator, contrary to recent speculation.

Elsewhere in Europe, the Bel-20 in Brussels lost 0.61 percent, Madrid's Ibex-35 shed 1.32 percent, Italy's Mib-30 slipped 0.20 percent, the AEX 25 in Amsterdam was off 0.27 percent and the Swiss Market Index fell 0.32 percent.

AFP, http://business.iafrica.com