Frankfurt: Air France-KLM Group, the region’s largest airline, fell to a one-week low as crude advanced for a seventh day. BHP Billiton and SAP AG led declines by mining and technology companies, which rely on sales in the US, the world’s largest economy.
Hennes & Mauritz AB slid the most in two weeks after the retailer reported revenue that was less than analysts estimated.
“A higher oil price could weigh on the economy and corporate profits, especially in the airline’’ industry, said Peter Braendle, who helps manage the equivalent of $46 billion (Rs1,98,374 crore) at Zurich-based Swisscanto Asset Management.
The Dow Jones Stoxx 600 Index lost 0.3% to 371.31 at 10:50 am in London as all 18 industry groups fell except for energy-related stocks. The Stoxx 50 also declined 0.3%. The Euro Stoxx 50, a measure for the 13 nations sharing the euro, decreased 0.4%.
The Stoxx 600 has dropped 1.2% this week after reports showed US home sales unexpectedly declined and consumer confidence slid more than economists forecast. The data deepened concern that a housing crisis will stifle growth in Europe’s largest export market.
Stocks in the US yesterday slid the most in two weeks, while Asian markets declined today for a second day.
National benchmarks fell in 16 of the 18 markets in western Europe. The UK’s FTSE 100 was little changed, France’s CAC 40 slid 0.4% and Germany’s DAX dropped 0.5%.
Shares of Air France lost 1.3% to 33.22 euros. British Airways Plc, Europe’s third-biggest airline, retreated 0.9% to 492.5 pence. Oil accounts for 30% of airlines’ costs, according to Credit Suisse Group
Oil rose in New York on concern a dispute over Iran’s detention of British servicemen could escalate, disrupting supplies from the Middle East. Crude for May delivery gained as much as $1.53, or 2.4%, to $64.46 a barrel in electronic after-hours trading.
“If tensions with Iran escalate further, profit margins of airlines, gas companies and chemical makers dependant on oil would be depressed,’’ said Heino Ruland, head of research at Wolfgang Steubing AG in Frankfurt.
BHP, Rio Tinto
BHP Billiton, the world’s biggest mining company, dropped 0.8% to 1,110 pence. Rio Tinto Group, the No. 3, slipped 2% to 2,827 pence.
SAP, the world’s largest maker of business-management software, fell 1.2% to 33.48 euros. Ericsson AB, the biggest producer of wireless-network equipment, lost 0.8% to 25.5 kronor.
Concern about the spread of home foreclosures and rising fuel prices pushed US consumer confidence from a five-year high this month, a report showed yesterday.
Oil companies bucked today’s retreat, with the Stoxx 600 Oil & Gas Index rising 1.6% to a one-month high. Royal Dutch Shell Plc, Europe’s biggest oil company, gained 1.7% to 1,713 pence. BP Plc, the region’s second-biggest, added 2.1% to 555 pence.
Petroleum Geo-Services ASA, the world’s second-biggest provider of oil-field-mapping services, rose 2% to 150.25 kroner.
Hennes & Mauritz, Europe’s second-largest clothing retailer, dropped 1.9% to 397.5 kronor. Revenue rose 11% to 16.8 billion kronor in the company’s fiscal first quarter, trailing the median analyst estimate of 17 billion kronor in a survey by Bloomberg News.
Siemens AG, Europe’s largest engineering company, lost 1.6% to 79.91 euros. The company’s supervisory board will hold a special meeting today to discuss “the difficult situation’’ the company got into after the arrest of management board member Johannes Feldmayer yesterday, Handelsblatt reported, without saying where it got the information.
Siemens spokesman Marc Langendorf wouldn’t say whether a meeting is scheduled when contacted by Bloomberg News.
EDP-Energias de Portugal SA, Portugal’s largest power company, fell 2.6%, to 4.05 euros. UBS AG is selling 72 million shares of EDP for between 4.08 euros and the market price, UBS said in an e-mail to clients. A spokeswoman for UBS wasn’t immediately available to comment.
Iberia Lineas Aereas de Espana SA, Spani’s No. 1 airline, added 3.2% to 3.91 euros. Texas Pacific Group is considering a 4 billion-euro bid for Iberia, the London-based Times said, citing an unidentified source close to the US private equity firm. British Airways Plc, which already owns 10% of Iberia, may also make a bid, the newspaper said.