European shares up by midday helped by oil, miners
18 Agustus 2008 18:32:27 (GMT+07:00)
Provided by: Reuters News
* FTSEurofirst 300 index up 0.4 percent
* Mining and oil stocks rise as commodity prices gain
* Travel, leisure and retail stocks fall as dollar eases
FRANKFURT, Aug 18 (Reuters) - European shares were up by midday on Monday in
volatile trade as firmer commodity prices helped oil and mining shares
offset declines in retailers and airlines stocks, which were hit by a
decline in the dollar.
By 1112 GMT, the pan-European FTSEurofirst 300 index <.FTEU3> was up 0.4
percent at 1,195.50 points, having fallen earlier by as much as 0.91
percent.
"The stock market is looking for direction, and it is looking towards
currencies and commodities as it has become more quiet on the macro and
earnings front," said Markus Steinbeis, head of European equities at Pioneer
Investments in Munich.
He said stocks benefiting from a firmer dollar were surrendering gains as
the U.S. currency eased from recent peaks.
The dollar retreated from a six-month high against the euro on Monday as an
overnight recovery in oil and commodity prices prompted a pause in the U.S.
currency's dramatic recovery this month. Aerospace group EADS <EAD.PA> fell
2.4 percent.
Oil rose more than $1 to top $115 a barrel and was up $0.34 at $114.11 at
1102 GMT, as investors eyed a potential supply threat from Tropical storm
Fay to oil and gas production in the Gulf of Mexico.
Oil majors Total <TOTF.PA> and Royal Dutch Shell <RDSa.AS> were both up over
2 percent, while the European travel and leisure index <.SXTP> and the DJ
Stoxx European retail index <.SXRP> fell 0.4 percent and 0.2 percent,
respectively.
Air France-KLM <AIRF.PA> fell 0.4 percent, Lufthansa <LHAG.DE> fell 0.5
percent, and British Airways <BAY.L> dropped 1.7 percent.
Commodities, which as an asset class have shed around 20 percent since
peaking in early July <.CRB>, drew strength from the dollar, and mining
stocks rose as a result.
Anglo American <AAL.L> rose 3 percent, Rio Tinto <RIO.L> rose 2.1 percent,
and Antofagasta <ANTO.L> rose 1.3 percent.
Erik Nielsen, chief economist at Goldman Sachs, said in a note that Europe
was suffering from a global oil price shock first and foremost.
"Although contrary to previous oil price shocks, this time around the pain
is coming primarily via a consumer strike in reaction to higher prices," he
said.
"The bad news is that this might last a few quarters; the good news is that
the European private sector is protecting their balance sheets, setting the
stage for a healthier (and wealthier) recovery next year," he added.
Around Europe, Britain's FTSE 100 index <.FTSE> rose 0.6 percent, Germany's
DAX index <.GDAXI> added 0.4 percent, and France's CAC 40 <.FCHI> gained 0.9
percent.
Shares in AS Roma <ASR.MI> were suspended after rising above the daily limit
on speculation fresh suitors may eye the Italian soccer team following the
death of club President Franco Sensi.
(Reporting by Eva Kuehnen, editing by Will Waterman)
