European Oil, Mining Stocks Gain; Techs Decline, Scania Climbsadmin
European energy and mining stocks, the region’s worst performers this quarter, rebounded as oil rose for a second day and copper gained for the first time in four days.
BP Plc, Europe’s second-biggest oil producer by market value, and BHP Billiton, the world’s largest mining company, paced gains.
“We are very positive on energy stocks,” said Mariano Sancho, the head of capital markets at Riva y Garcia in Barcelona, which manages about $490 million. “Even as crude oil prices retreat, oil companies are still going to have huge margins and great earnings.”
CSR Plc tumbled, leading technology stocks lower, after the maker of microchips for Nokia Oyj mobile phones cut its revenue forecast. Scania AB climbed after rejecting MAN AG’s 9.6 billion- euro ($12.1 billion) offer to buy the Swedish truckmaker.
The Dow Jones Stoxx 600 Index was little changed, slipping 0.1 percent to 335.25 at 1:45 p.m. in London. The Stoxx 50 lost 0.2 percent, and the Euro Stoxx 50, a measure for the 12 nations sharing the euro, dropped 0.4 percent.
Stocks gained last week as takeover speculation buoyed confidence in equities and a U.S. government report showed inflation slowed in the world’s largest economy. The Commerce Department releases current account data today before the Federal Reserve’s two-day meeting on interest rates, which begins tomorrow.
Investors are “looking to the Fed meeting and this week’s set of economic figures for guidance as to whether rates need to rise at all for the remainder of the year,” said Martin Slaney, head of spread-betting at GFT Global Markets in London.
National benchmarks fell in 11 of the 18 western European markets. The U.K.’s FTSE 100 Index added 0.6 percent, and France’s CAC 40 climbed 0.2 percent. Germany’s DAX was little changed at 5939.91.
Indexes maintained then pared gains after the Commerce Department reported the U.S. current-account gap widened last quarter to $218.4 billion, the second-largest on record. Economists forecast a second-quarter deficit of $213 billion, according to a Bloomberg News survey.
A growing deficit poses a risk to the economy should investors as it may weaken the dollar and push rates higher. The Fed left its main rate unchanged last month at 5.25 percent after 17 consecutive increases since June 2004. Policy makers announce their next rate decision on Sept. 20.
BP gained 1.3 percent to 580.5 pence, advancing for the first day in three. Repsol YPF SA, Europe’s fifth-biggest oil company, gained 0.8 percent to 21.72 euros.
Crude oil prices rose on speculation the Organization of Petroleum Exporting Countries may cut production if prices extend a two-month slide.
Oil, Copper Gain
Oil for October delivery gained 50 cents to $63.83 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Crude fell last week, its third consecutive decline.
“The rebound in commodities is logical given the harsh correction we’ve seen,” said Sergi Martin, who helps oversees $5.3 billion at Credit Andorra in Andorra. “Strong demand from emerging market economies is still very much alive.”
BG Group Plc, the U.K.’s No. 3 oil and gas producer, gained 2.1 percent to 653.5 pence on speculation that it may be the target of a takeover bid.
“The rumor today is that there could be a bid for BG,” said Martin Slaney, head of spread-betting at GFT Global Markets in London. “I’m not sure it’s going to happen, but the rumor is certainly out there.”
Jonathan Miller, a spokesman for BG in Reading, England, said the company does not “comment on rumor and speculation.”
BHP gained 2.9 percent to 936 pence. Vedanta Resources Plc, which runs Zambia’s biggest copper mines, added 2.6 percent to 1,253 pence.
Copper for delivery in three months advanced $120, or 1.7 percent, to $7,390 a metric ton. Nickel and zinc also rose.
Shares of Scania gained 7.4 percent to 456 kronor. MAN offered 0.151 new ordinary shares and 38.35 euros in cash r each Scania share, the Munich-based company said in a statement day. The offer is worth 48 euros or 442 kronor per share, MAN said.
Scania’s board “unanimously decided not to support” the MAN proposal, Scania said today in a statement to the Waymaker newswire, without specifying the reasons for the rejection.
“The offer is becoming an unfriendly one,” said Salah Seddik, who helps manage about $6.4 billion at Richelieu Finance in Paris, “It will certainly lead to an increase in price or more difficult negotiations.”
MAN shares fell 3.4 percent to 61.80 euros.
Shares of CSR, whose microchips are used in Nokia Oyj mobile phones, lost 25 percent to 859 pence after lowering its sales forecast for the third and fourth quarters because of weaker-than-expected demand.
Nokia, the world’s biggest producer of handsets, fell 1.3 percent to 14.95 euros.
CSR expects third-quarter revenue to be between $210 million and $215 million. Fourth quarter sales are likely to be about 5 percent below the lower end of the revised third-quarter 2006 revenue range, it said. The company had forecast in July that third-quarter sales would be in the range of $225 million to $240 million, with the fourth quarter revenues “broadly similar” to the third quarter.
TeliaSonera AB rose 2.7 percent to 46.4 kronor, and SAS AB gained 2.5 percent to 94 kronor. Sweden’s four-party opposition yesterday ousted the Social Democrats following 12 years in power and was given a mandate for its plan to sell state-owned assets. The government owns 43.5 percent of TeliaSonera, the biggest Nordic telephone company, and 21.4 percent of SAS, the owner of the biggest Nordic airline.
Nordea Bank AB, the region’s large lender by market value in which the Swedish government has a 19.9 percent interest, rose 2.4 percent.
Sweden’s Asset Sales
The opposition, led by Fredrik Reinfeldt’s Moderate Party, has said it plans to sell state holdings worth about 150 billion kronor ($20 billion) over the next three years and use the proceeds to reduce the country’s debt.
Tiscali SpA added 2.6 percent after Europe’s third-largest Internet provider agreed to sell its Dutch unit to Royal KPN NV, the Netherlands’ largest phone company in deal valuing the Cagliari, Italy-based company at 895 million euros. KPN shares fell 0.4 percent in Amsterdam.
Collins Stewart Tullett Plc added 4.2 percent to 816.5 pence. The world’s second-biggest broker of securities trades between banks said first-half profit more than doubled to 68.5 million pounds ($129 million). Revenue rose 9.8 percent to 452.1 million pounds.