|
Bourses slip on oil
|
 |
February 17, 1999: 1:43 p.m. ET
London, Frankfurt, Paris close down; FTSE snaps winning streak
|
LONDON (CNNfn) - Falling crude oil prices and a weak start on Wall Street weighed on European bourses Wednesday as London's blue-chip index reversed a five-day winning streak to close nearly half a percentage point lower.
With the exception of the Swiss Market Index, which finished 30.7 points, or 0.44 percent higher, at 7,045.9, Europe's major equity markets closed broadly lower ahead of a meeting Thursday of the European Central Bank's policy board.
The bank has indicated that it is unlikely to cut rates, despite calls from some economic quarters for another 25 basis-point easing in the next few months.
London's FTSE shed 0.49 percent, or 30.2 points, to 6,078.4 and Germany's shares gave up 1.53 percent to 4,820.42 on a day in which oil prices slid below $10 a barrel, hovering just above historic lows.
The dramatic slump comes amid a global oil glut and underlined OPEC's failure to stick to supply-constraining production quotas.
Adding to the trepidation, oil giant BP Amoco (BPA) said it would cut 3,000 more jobs this year, on top of 7,000 already announced, as it strives to achieve $2 billion in savings from the companies' $55 billion merger a year ahead of schedule.
Initially, BP Amoco had estimated the merger would result in the loss of 6,000 jobs worldwide. BP Amoco also posted a 59 percent decline in replacement-cost profit in the fourth quarter. Shares of the company ended down nearly 2 percent at 843-1/2 pence in London.
Shares of pharmaceutical giant Zeneca (ZEN) slipped on the FTSE, dragging down other drug stocks, after the company reported a two percent drop in pre-tax profit in 1998 to 1.063 billion pounds ($1.74 billion), at the low range of analyst expectations. Sales climbed 6 percent to 5.510 billion pounds.
Separately, fresh economic data showed a 5,700 decline in British joblessness last month to 1.3 million, the lowest level since 1980. The unemployment rate held steady from the previous month, at 4.6 percent.
The Dax fell 74.69 points, with Deutsche Telekom (FDTE) shaving 3.9 percent after a German newspaper said the company expects net profits to decline 6 percent in 1999.
In the financial sector, Deutsche Bank said its operating profit remained unchanged at 4.3 billion marks ($2.46 billion) in 1998, excluding a 3.2 billion-mark special dividend from Daimler-Benz and without the cost of the euro and millennium changeovers. Deutsche will report its full results March 18.
Commerzbank (FCBK) lost 0.40 euros to close at 24.90, while Hypovereinsbank (FBVM) shed 2.50 euros to 52.80.
The losses came amid signs that a compensation fund for victims of the Nazi Holocaust established Tuesday by 12 leading German companies -- including Deutsche Bank -- would not pass muster with lawyers handling the survivors' class-action suits.
Traders also were keeping their eyes on crucial talks between employers and Germany's largest union, IG Metall, which are due to finish late Wednesday night.
MAN (FMAN), a German machinery maker, saw its shares slip 2.50 euros to 230, while steel maker Preussag (FPRS) gave up 1 euro to 432. Application software maker SAP (FSAP) closed 6 euros lower at 313.
Paris shares eased 1.65 percent, or 66.83 points, to 3,985.49. Lagardere (PMMB), whose Matra defense unit is slated to merge with Aérospatiale, gave up 2.65 percent, while Thomson-CSF (PHO) slumped 2.71 percent.
The French government will select core shareholders for its privatization of Credit Lyonnais in May, the French business newspaper Les Echos reported Wednesday.
Separately, the Financial Times reported that Banque Nationale de Paris is offering to guarantee the jobs of Crédit Lyonnais' 30,000 workers in return for a sizable stake in the privatized entity.
The French government plans to sell up to 30 percent of the company to institutional investors and float 50 percent on the open stock market. Employees of the bank and government officials are expected to hold the remainder, the FT reported.
In London, U.K. mortgage bank Woolwich (WWH) surged 5.34 percent to 367 pence after the company said annual pretax profits came in at 505.1 million pounds ($823.9 million), slightly ahead of consensus estimates. Woolwich also surprised markets by announcing a special 15 pence-per-share dividend.
Other mortgage banks got a boost from the news. Halifax (HFX) climbed 0.65 percent while Abbey National (ANL) gained 0.84 percent. Halifax and Abbey are due to report their earnings Thursday and Friday, respectively.
British advertising agency WPP (WPP) lost 3.78 percent to close at 464-3/4 pence. Earlier in the day, WPP posted a 20 percent rise in full-year profit but suffered a sell-off in its stock as investors sought to cash in after recent highs. 
-- from staff and wire reports
|
|
|
|
|
 |
|
