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News > International
Europe ends lower
June 6, 2001: 12:12 p.m. ET

Oil and telecoms stocks down as Wall Street depresses bourses
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LONDON (CNN) - Europe's major bourses reversed midday gains to end lower on Wednesday, with telecoms and oil stocks among the weakest performers.

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Falls on Wall Street forced exchanges into negative territory. London's FTSE 100 finished 0.4 percent lower at 5,901.5. The owner of Britain's train network, Railtrack (RTK), was the biggest faller for the second day running.

It  sank as low as 300 pence before ending 6 percent down at 340 pence. It had suffered a 17 percent plunge in the previous session after analysts at investment bank ABN Amro valued the company at just 58 pence a share.

In Paris, the CAC 40 blue chip index closed 0.4 percent lower at 5,496.49. France Telecom (PFTE) was down 2.1 percent and its mobile sidekick Orange (POGE) fell 1.2 percent.

Frankfurt's electronically traded Xetra Dax was down 0.9 percent in late trading at 6,186.28. Deutsche Telekom (FDTE) shares took a hit when U.S. markets opened and shareholders of Voicestream, recently taken over by the German carrier, began selling their DT shares. They were down 4.4 percent.

The AEX index in Amsterdam was 0.1 percent to the good, Milan's MIB30 index fell by 1.1 percent and the SMI in Zurich lost 0.2 percent.

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was off 0.7 percent, with telecoms and the oil sectors down more than 2 percent. Oil stocks unraveled recent gains on the back of weaker crude prices.

BP (BP-A), the third-biggest publicly traded oil company, fell 1.4 percent and Shell Transport & Trading (SHEL), which owns 40 percent of Royal Dutch/Shell, the No. 2 oil company, lost 1.6 percent in London. Total Fina Elf (PFP), the fifth-biggest oil company, dropped 2.5 percent in Paris.

Brent crude for July was 76 cents lower at $28.92 a barrel on news of brimming U.S. inventories. With Iraq halting its exports in protest at UN sanctions, Saudi Arabia said it had no doubt that Opec would raise output in the third quarter

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In the U.S., the Nasdaq composite index had fallen 25 points, or 1.1 percent, by mid-morning to 2,208.58 on fears about corporate earnings, while the Dow Jones industrial average was down 70.27 points, or 0.6 percent, at 11,105.57.

In the currency market, the euro was having another bad day against the U.S. dollar, fetching 84.67 cents compared with 85.41 cents in late New York trading on Tuesday.

The Bank of England announced interest rates would remain unchanged at 5.25 percent, a move that was widely expected ahead of tomorrow's national election.

"It's probable that there may not have been a change even if we were not having an election tomorrow: They had cuts in April and May, so it was a case of wait-and-see anyway this month," Merrill Lynch analyst Michael Taylor told CNN.

The European Central Bank, which delivers its rate decision on Thursday, is also expected to keep rates on hold at 4.5 percent.

Banks stocks fared best in London. Alliance & Leicester (AL-) topped the leaderboard, up 3 percent, with Royal Bank of Scotland (RBOS) up 2.5 percent and Barclays (BARC) rising 1.8 percent as defensive stocks came back into favour. graphic

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