Bloomberg - 18/4/2006
European stocks may fall as oil climbed to near record highs, stoking concern that an earnings growth slowdown will worsen. Airlines such as British Airways Plc and chemical makers including Air Liquide SA may decline.
Energy companies including Total SA may advance, limiting losses. Mining stocks such as BHP Billiton may also gain as copper rose to a record and gold reached the highest in more than 25 years. Royal Philips Electronics NV may be active after reporting earnings.
April futures on France's CAC 40 Index slid 7.5 to 5095.5 at 7:01 a.m. in London. The U.K.'s FTSE 100 Index may fall 4 to 6025, according to CMC Markets, a betting firm. Germany's DAX might drop 12 to 5907, according to Deutsche Bank AG.
``Oil prices are likely to weigh on the market today,'' said Lawrence Peterman, investment director at Eden Financial Ltd. in London. ``Mining and oil stocks may help as they have a large weight in some countries such as the U.K.'' Raw materials producers account for almost a quarter of Britain's FTSE All- Share Index.
Exchanges in the region will resume trading following the four-day Easter break. Stocks declined in the U.S. yesterday, as oil surpassed $70 a barrel and gold rose the most since September 2001, increasing concern that higher commodity prices will hurt the economy.
``The short trading week looks set to be dominated by oil prices,'' said Matt Buckland, a trader at CMC Markets. ``The news is likely to depress stocks with higher input costs set to damage margins.''
Earnings for companies in the Dow Jones Stoxx 600 Index may grow 7.4 percent on average this year, less than the 25 percent increase in 2005, according to estimates compiled by FactSet Research Systems Inc.
Oil rose to within 10 cents of its record high in New York on concern that a dispute over Iran's nuclear program may disrupt supplies from the world's fourth-largest producer. Contracts for May delivery rose as much as 0.5 percent to $70.75 a barrel.
Brent oil advanced 0.5 percent to $71.84 a barrel in London, its sixth gain.
Airlines and companies that use oil as a raw material may slip. American depositary receipts of British Airways, Europe's third-largest carrier, finished 1.1 percent below the stock's price in London. ADRs of Air Liquide, the world's largest maker of industrial gases, ended 1.2 percent lower than the shares in Paris.
Total, Europe's third-largest oil company, may advance. BHP, the world's biggest mining company, may also gain. The company gets about a fifth of its sales from oil. Its Australian-traded shares gained 2.5 percent to a record.
BHP and other mining companies may also get lifted as copper futures rose to 61,450 yuan ($7,663) a ton in Shanghai and gold prices reached $618.62 an ounce, the highest since Dec. 5, 1980.
Philips, Europe's largest consumer electronics maker, said first-quarter profit rose 37 percent to 160 million euros ($196 million) on an acquisition in the lighting division and demand for semiconductors and flat-screen televisions.
Still, the Dutch company had been expected to report net income of 222.5 million euros on sales of 7.05 billion euros, the median estimates of 14 analysts in a Bloomberg News survey. Sales rose to 7.37 billion euros from 6.49 billion euros, the company reported.
London Stock Exchange Plc, Europe's biggest equity market, may climb. The New York Stock Exchange is expected to build a stake in the LSE after the Nasdaq Stock Market Inc. bought a holding this month, the Sunday Times reported, without saying where it got its information.
BAA Plc may also rise. The airport operator, the target of a hostile takeover from Spain's Grupo Ferrovial SA, said it rejected a bid led by Goldman Sachs Group Inc. that valued the world's largest airports operator at 9.4 billion pounds ($16.5 billion).
In the U.S., the Standard & Poor's 500 Index fell 0.3 percent yesterday, while the Dow Jones Industrial Average retreated 0.6 percent. The Nasdaq Composite Index lost 0.6 percent.