European Stocks Fall on 10% Oil surge

123jump.com Staff
06 Jun, 2008
New York City

European stocks fell across the region as crude oil jumped 9% in London trading. The sustained imports from Asia and the U.S., falling dollar and the use of oil as a hedge and worries related to supply are contributing to the crude oil rise. Every member of the CAC-40 index in Paris fell and only of DAX 30 index stocks in Germany closed higher. Switzerland, Germany and France dropped more than 2%.

[R]2:00PM New York, 8:00PM Frankfurt – European stocks fall responding to another oil price surge of 9% and $137 a barrel./R]

Europe market update

European stocks fell in today’s session as crude oil prices enters the $137 a barrel range. The key indices in Germany and France closed lower with no gainers in CAC-40 index stocks and only one gainer among the Dax 30 index stocks.

The CAC 40 retreated sharply losing 2.07% to 4,805.43. In Germany the DAX 30-index fell 130.53 points or 1.88% to 6,811.30. Shares in Switzerland retreated as the Swiss Market index fell 180.81 points or 2.39% to 7,386.42. The FTSE 100 declined 74.60 points or 1.24% to 5,920.70.

Oil prices rise above $130.00 a barrel

Brent Crude oil climbed to $137.69 a barrel an increase of $7.96 or 10.2% reaching another record. Crude oil price in New York surged 11% to $138.88. Investors speculate that a sustained oil demand from Asia and the U.S. and interest from financial investors to hedge against the continued declined in the U.S. dollar are driving the crude oil higher.

Steel production in Germany rises

Production of raw steel amounts to 4.15 million tons in May 2008. According to provisional results of the Federal Statistical Office in Germany, 2.62 million tons of pig iron and 4.15 million tons of raw steel were produced in Germany in May 2008. That was a 2.1% increase of pig iron and a 2.6% increase of raw steel from a year ago.

Smoking bans and turnover in the restaurant industry.

The Federal Statistical Office compared the trends in restaurants'' turnover between Länder with and Länder without smoking bans to determine potential effects of laws banning smoking on the turnover of restaurants and the like. In establishments mainly serving beverages in the restaurant industry, real turnover declined 9.8% in the states with smoking bans such as in Baden-Württemberg and Lower Saxony in the third quarter of 2007 compared with the same quarter a year earlier.

In the other states, the sales were down 7% in the same period. In the fourth quarter of 2007, Hessen introduced a statutory smoking ban, too.

Gainers and losers

There were no gainers among the CAC 40 index stocks.

Air France -KLM led the decliners in the CAC 40 index with a loss of 5.74% to 16.41 euros followed by losses in Renault of 5.24% to 61.46 euros, in Alcatel Lucent of 4.19% to 4.57 euros, in Michelin of 4.09% to 52.27 euros and in Dexia of 3.48% to 14.13 euros.

Among the DAX 30 index shares, Adidas was the only gainer with a rise of 0.13% to 19.92 euros.

Commerzbank led the losers in the DAX 30 index with a fall of 5.32% to 19.92 euros followed by losses in Deutsche Lufthansa of 5.02% to 15.89 euros, in Daimler of 4.76% to 45.01 euros, in BMW AG of 3.93% to 34.72 euros and in Continental AG of 3.30% to 68.77 euros.

Precious metals rise

Precious metals advanced and closed the week higher. Gold gained $18.2 to $890.50 an ounce in London. Silver gained 28 cents to $17.19 per ounce . Platinum climbed $72 to $2,050.00 an ounce and palladium increased $6 to $429 an ounce.