Posted by
alfredlester on Tuesday, October 27, 2009 11:06:54 AM
European markets were pushed higher by oil stocks Tuesday after BP&S217;s third-quarter results beat analysts&S217; expectations. Asian indexes closed lower, following losses on Wall Street the previous day amid fears that equities have become overvalued.
On Wall Street, stock futures were little changed ahead of Tuesday&S217;s opening as investors prepared for new reports on home prices and consumer confidence.
In afternoon European trading, Britain&S217;s FTSE 100 rose 0.5 percent to 5,215.48, Germany&S217;s DAX added 0.2 percent to 5,655.26 and France&S217;s CAC 40 climbed 0.4 percent to 3,760.88.
Major Asian markets dropped by around 2 percent or more, with shares in resource companies hit after a steep fall in commodity prices.
In London, BP gained 4 percent after it reported a 34 percent fall in third-quarter profit to $5.3 billion, as oil and gas prices fell from record levels a year earlier.
The figure from Europe&S217;s second-largest oil company compared with an $8 billion profit in the third quarter of 2008, but was up from $4.4 billion in the second quarter and well ahead of analysts&S217; forecasts.
&S220;The fall in earnings was well trailed, but the numbers nonetheless have obliterated market forecasts, as evidenced by the spike in the share price in early trade,&S221; said Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers.
Two other oil stocks, Total and Shell, added 2.1 percent and 1.4 percent respectively, partly offsetting weakness in financials.
In Asia, investors unloaded shares after American markets got pounded as the dollar strengthened and anxiety grew about the market overheating, given the troubles still facing major Western economies and a number of financial companies free instant credit reports.
Some analysts said the markets, up massively since March, could get more choppy even if they continued to advance.
&S220;The market has gotten high enough, so there&S217;s some profit-taking right now,&S221; said Francis Lun, general manager of Fulbright Securities in Hong Kong. &S220;The summer rally seems to be over, and I think we&S217;re facing a cold winter.&S221;
In Japan, the benchmark Nikkei 225 stock index lost 1.5 percent to 10,212.46 points. Hong Kong&S217;s market, which was closed Monday, dropped 1.9 percent to 22,169.59.
China&S217;s Shanghai market led Asia&S217;s declines, tumbling 2.8 percent to 3,021.46. Australia&S217;s market lost 1.6 percent and India&S217;s Sensex was 2 percent lower.
South Korea&S217;s Kospi shed 0.5 percent to 1,649.53 a day after new figures showed the country&S217;s economy, Asia&S217;s fourth largest, expanded at its quickest pace in seven years in the last quarter.
Oil prices lingered below $79 a barrel Tuesday in Europe after three days of losses as investors eyed a volatile dollar. Benchmark crude for December delivery rose 28 cents to $78.96; the contract fell $1.82 overnight.
Oil Stocks Push European Markets Higher
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