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Europe shares fall as oil stocks weigh

Europe shares fall as oil stocks weigh
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First Published: Fri, Jul 10 2009. 02 52 PM IST
Updated: Fri, Jul 10 2009. 02 52 PM IST
Frankfurt: European shares fell on Friday, with oil producers leading the losers following negative statements from Chevron, the second-largest US oil company, that refuelled fears about company earnings.
At 1:48pm, the FTSEurofirst 300 index of top European shares was down 0.1% at 822.56 points after gaining 0.8% on Thursday. The pan-European index has fallen 7.6% since 10 June after rallying 38 percent from a record low hit on 9 March.
“There is a lack of impulse, full stop,” said Giuseppe-Guido Amato, strategist at brokerage Lang & Schwarz in Germany.
“Of course, the Chevron news is slightly negative, but only for the sector,” he said, adding that lower oil prices also weighed.
Chevron Corp late on Thursday warned that second-quarter earnings would be hit by a sharp decline in US refining margins, sending its shares down in extended trading. Its shares in Frankfurt were down 1.3%.
Oil and gas stocks took most points off the FTSEurofirst 300, and the DJ Stoxx Oil & Gas Index was down 0.3%, while crude oil dropped 0.5%.
Royal Dutch Shell, BP and BG Group were down between 0.2 and 0.7%.
Around Europe, UK’s FTSE 100 index was down 0.3%, Germany’s DAX index fell 0.03 percent and France’s CAC 40 eased 0.3%.
Focus on US data
Shares in German chipmaker Infineon rose 5.4% after falling as much as 5.2% earlier, as the company said it is planning a rights issue, while Apollo Management LP is to take a stake in the company.
“Given the increasing uncertainty about Infineon’s, and especially Apollo’s, agenda we recommend staying on the sidelines,” Commerzbank wrote in a note to clients.
Anglo-Australian miner Rio Tinto fell 1.2%. Chinese security officials accused four detained staff of the company of bribery on Friday.
The DJ Telcom Index dropped 0.3%, with Telekom Austria falling 2.2%, as UBS pointed to uncertainty about its outlook for the current year following an interview with the company’s chief executive.
Later in the day, investors will be focus on US macroeconomic data, with trade data due at 6:00pm.
“The trade deficit improvement should have come to a halt in May, due to higher commodity prices and a likely end to the destocking process,” UniCredit wrote in a note.
“The deficit probably increased to $32 billion vs $29.2 billion,” it added.
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First Published: Fri, Jul 10 2009. 02 52 PM IST
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