Oil price fall pushes Euro stocks higher

LONDON – European equities rose yesterday, extending the previous session’s rally as weaker oil prices encouraged investors to buy into cyclical sectors.

“We believe that there is a reasonable amount of cash on the sidelines waiting to go into the equity markets,” said Nigel Cobby, managing director of European equities at JP Morgan. By 0730 GMT, the FTSE Eurotop 300 index of pan-European blue chips was up 0,88 per cent at 1,001.69 points while the narrower DJ Euro Stoxx 50 index rose 1,03 per cent to 2,796.29.Among standouts, Germany’s Deutsche Bank AG rose two percent after saying it was not in merger talks with Swiss rival Credit Suisse Group or any other bank, sources familiar with the situation told Reuters.However CS Group shares also rose, adding 2,5 per cent to 44,90 Swiss francs.Dutch insurer Aegon rose 2,6 per cent to 10,31 euros after valuing its insurance operations in 2003 at 17 billion euros, eight percent up on 2002 thanks to improved financial markets, but weighed down by a weaker dollar.Shares in Roche Holdings rose 0,95 per cent after the Swiss healthcare group’s top pharmaceutical executive said he expects growth in pharmaceutical sales in 2004 to be above an expected rise of seven to nine percent in the global market.News from drugmakers including GlaxoSmithkline and Novartis SA will be a focus in the early part of the week with the American Society of Clinical Oncology holding its annual three-day meeting in New Orleans.Strong earnings growth from European companies have helped firm market sentiment but high oil prices and rising interest rates are seen continuing to weigh on investors as the effects of these begin to bite.Oil prices stayed below US$40 a barrel yesterday as increased supplies in the United States and Opec’s pledge to bump up output eased immediate concerns of a supply crunch.US light crude for July dropped 17 cents, or 0,4 percent, to US$38,32 per barrel, close to 10 percent below a 21-year high of US$42,45 hit last week.”All the data that came out last week was very positive for equities.Now, we think people will look more closely at fundamental valuations and economic growth,” Cobby said.Shares in budget airline EasyJet were a standout loser, plunging 15 per cent to 157 pence after it said it was guiding analysts’ forecast for current year profits as rising fuel prices and lower fares remained a concern for the group.EasyJet lost a quarter of its stock market value last month when it warned that cut-throat competition from rivals such as Ryanair would keep fares under pressure.Inflation data due to be released this week in the United States will be closely watched for any changes that might alter expectations the Federal Reserve will raise interest rates by a quarter of a percentage point later this month.Fed Chairman Alan Greenspan is due to give speeches on today and Thursday.-Nampa-ReutersBy 0730 GMT, the FTSE Eurotop 300 index of pan-European blue chips was up 0,88 per cent at 1,001.69 points while the narrower DJ Euro Stoxx 50 index rose 1,03 per cent to 2,796.29.Among standouts, Germany’s Deutsche Bank AG rose two percent after saying it was not in merger talks with Swiss rival Credit Suisse Group or any other bank, sources familiar with the situation told Reuters.However CS Group shares also rose, adding 2,5 per cent to 44,90 Swiss francs.Dutch insurer Aegon rose 2,6 per cent to 10,31 euros after valuing its insurance operations in 2003 at 17 billion euros, eight percent up on 2002 thanks to improved financial markets, but weighed down by a weaker dollar.Shares in Roche Holdings rose 0,95 per cent after the Swiss healthcare group’s top pharmaceutical executive said he expects growth in pharmaceutical sales in 2004 to be above an expected rise of seven to nine percent in the global market.News from drugmakers including GlaxoSmithkline and Novartis SA will be a focus in the early part of the week with the American Society of Clinical Oncology holding its annual three-day meeting in New Orleans.Strong earnings growth from European companies have helped firm market sentiment but high oil prices and rising interest rates are seen continuing to weigh on investors as the effects of these begin to bite.Oil prices stayed below US$40 a barrel yesterday as increased supplies in the United States and Opec’s pledge to bump up output eased immediate concerns of a supply crunch.US light crude for July dropped 17 cents, or 0,4 percent, to US$38,32 per barrel, close to 10 percent below a 21-year high of US$42,45 hit last week.”All the data that came out last week was very positive for equities.Now, we think people will look more closely at fundamental valuations and economic growth,” Cobby said.Shares in budget airline EasyJet were a standout loser, plunging 15 per cent to 157 pence after it said it was guiding analysts’ forecast for current year profits as rising fuel prices and lower fares remained a concern for the group.EasyJet lost a quarter of its stock market value last month when it warned that cut-throat competition from rivals such as Ryanair would keep fares under pressure.Inflation data due to be released this week in the United States will be closely watched for any changes that might alter expectations the Federal Reserve will raise interest rates by a quarter of a percentage point later this month.Fed Chairman Alan Greenspan is due to give speeches on today and Thursday.-Nampa-Reuters