European Stocks Drop on Global Demand Concern; BP Falls on Oil Oct. 19 (Bloomberg) -- European stocks fell, pushing the Dow Jones Stoxx 600 Index to its biggest decline in two weeks, amid concern interest rates worldwide may rise, hurting consumer demand and companies' profits.
Energy producers such as BP Plc and Total SA led the drop as oil fell for a second day. Infineon Technologies AG paced a decline among semiconductor-related companies after Intel Corp. said profit growth slowed. ``There is an increasing worry that world demand will slow as a result of higher interest rates,'' said Kenneth Blomqvist, a fund manager at Handelsbanken Asset Management in Stockholm, which manages $37 billion. The Stoxx 600 fell for a third day, losing 1.3 percent to 284.45 as of 10:59 a.m. in London. It was the biggest decline since Oct. 6. The Stoxx 50 declined 1.1 percent, while the Euro Stoxx 50, a gauge for the 12 countries using the euro, slipped 1.3 percent. Concern that inflation may drive central banks in Europe and the U.S. to raise interest rates has helped send the Stoxx 600 down 4.9 percent from a 3 1/2 year high on Oct. 4. The U.S. Federal Reserve Vice Chairman Roger Ferguson said yesterday after the close of European markets that the central bank's policy of raising its benchmark interest rate at a ``measured'' pace is still the correct one. European Central Bank Chief Economist Otmar Issing said on Oct. 17 inflation may breach the central bank's 2 percent ceiling next year. The ECB hasn't raised interest rates for five years. National indexes dropped in all 17 western European markets that were open. The U.K.'s FTSE 100 Index retreated 1.2 percent and Germany's DAX Index fell 1.6 percent. France's CAC Index lost 1.3 percent. Norway's OBX Index fell the most, dropping 3 percent, paced by oil producers Statoil ASA and Norsk Hydro ASA. Oil & Gas Slump The Stoxx 600 Oil & Gas Index, which includes companies such as BP and Total SA, has slumped 8.5 percent since Oct. 4. The measure lead declines among 18 industry group in the Stoxx 600 in the period and fell 1.5 percent today. Still, the benchmark is up 25 percent for the year, the second-best performer. BP, Europe's biggest oil company, dropped 1.2 percent to 612.5 pence. Total, the region's No. 3, slipped 1.9 percent to 203.5 euros. Statoil and Norsk Hydro slipped 2.4 percent and 2.1 percent, respectively. Crude oil fell for a second day on forecasts Hurricane Wilma will miss rigs in the U.S. Gulf and before a report that may show supplies rose. Oil fell as much as 0.8 percent to $62.70 a barrel in electronic trading on the New York Mercantile Exchange. Infineon, Intel Infineon, Europe's biggest chipmaker, fell 1.5 percent to 7.99 euros. ASML Holding NV, Europe's largest maker of equipment to produce semiconductors, slipped 1.3 percent to 13.89 euros Intel Corp., the world's largest semiconductor maker said profit growth slowed to 4.7 percent after the company failed to meet demand for some chipsets. The company also forecast sales that missed some analysts' estimates. The Stoxx 600 Technology Index fell 1.7 percent, with all its members declining. Rio Tinto Group, the world's second-largest iron-ore exporter, slipped 3 percent to 2,151 pence. Third-quarter production of the steelmaking raw material rose 18 percent as it boosted mine capacity and shipped record volumes from Western Australia. Commodity prices and mining company profits have surged to records because of demand for raw materials in China. Slowing Demand Demand from China will see a ``gradual slowing,'' said Lucy Macdonald, chief investment officer of global equities at RCM Ltd. in London, which oversees $49 billion. ``That could affect the sentiment towards the commodity producers.'' China probably expanded at a slower pace in the third quarter as exports cooled and falling prices prompted manufacturers to rein in investment. Gross domestic product likely rose 9.2 percent from a year earlier, according to the median estimate of 17 economists surveyed by Bloomberg News, after climbing 9.5 percent in the second quarter. BHP Billiton, the world's largest mining company, slid 3.6 percent to 789 pence. The Stoxx 600 Basic Resource Index was the worst performing industry group in the broader measure, slipping 2.3 percent. Record prices for commodities such as gold and copper has helped the benchmark to become this year's top performer. The mining stocks measure has declined 9 percent since its peak on Sept 28, paring this year's gains to 27 percent. Copper futures reached a record in London yesterday. `In-Between Year' Ericsson AB, the world's biggest maker of mobile-phone networks, fell 1.5 percent to 26.6 Swedish kronor. The company expects 2005 to be an ``in-between year'' in China because of delays in getting orders signed and new wireless licenses issued, daily Dagens Industri reported, citing Mats Olsson, head of Ericsson in China. Gestevision Telecinco SA and Antena 3 de Television SA Spain's largest commercial television stations were downgraded to ``equal- weight'' from ``overweight'' by analysts at Lehman Brothers Holdings Inc. Telecinco fell 3.2 percent to 16.47 euros. Antena 3 declined 3.1 percent to 14.35 euros. A.P. Moeller-Maersk A/S, the world's biggest shipping company, slipped 4.4 percent to 56,000 kroner. UBS AG cut its share-price forecast for the Danish company by 8.3 percent to 55,000 kroner. Akzo Nobel Declines Akzo Nobel NV, the largest Dutch chemical company and drugmaker, gained 2.6 percent to 36.69 euros after reporting third-quarter net income that fell less than analysts expected. Profit slipped 66 percent to 175 million euros ($209 million) as the company didn't repeat divestment gains and higher prices for raw materials cut into profit. Nine analysts surveyed by Bloomberg expected net income of 170 million euros. A government report today may show rising production and increased imports boosted U.S. oil stockpiles by 2.25 million barrels last week, according to the median forecast from a Bloomberg survey of 13 analysts. The report from the U.S. Energy Department is released at 10:30 a.m. Washington time. U.S. stocks fell yesterday after a report showed the biggest jump in producer prices in 15 years, rekindling inflation concerns. Oil- related stocks paced the drop, with an industry benchmark slumping 4.4 percent. The Standard & Poor's 500 Index dropped 1 percent to 1178.14. The Dow Jones Industrial Average slipped 0.6 and the Nasdaq Composite Index slid 0.7 percent. To contact the reporter on this story: David Kroon in Stockholm [EMAIL PROTECTED] Last Updated: October 19, 2005 06:00 EDT ------------------------ Yahoo! Groups Sponsor --------------------~--> Try Online Currency Trading with GFT. Free 50K Demo. Trade 24 Hours. Commission-Free. http://us.click.yahoo.com/RvFikB/9M2KAA/U1CZAA/zMEolB/TM --------------------------------------------------------------------~-> Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/obrolan-bandar/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
