Financial Times: Bourses edge ahead as oil prices recede: “talk of a bid from Total of France for the ailing oil giant Royal Dutch/Shell, could add another dimension to the oil sector” (ShellNews.net)

By Darryl Thomson

Published: August 16 2004 07:47 | Last updated: August 16 2004 15:11

European blue chips inched higher in mid-afternoon trade on Monday as oil prices eased back from earlier highs and Wall Street opened with modest gains.

The pan-European FTSE Eurotop 300 index was up 0.2 per cent to 942.64. In Frankfurt, the Xetra Dax was up 0.4 per cent but the CAC-40 in Paris was off 0.1 per cent to 3,481.36. London’s FTSE 100 was 0.3 per cent firmer.

In New York, the Dow Jones Industrial Average was up 0.2 per cent while the tech-heavy Nasdaq Composite index was 0.5 per cent higher.

In the oil market, Nymex WTI receded to $46.38 a barrel in electronic trade, off its record high of $46.91 set in Asia, as President Hugo Chavez of Venezuela survived a recall election.

Uncertainty of a possible presidential election in Venezuela, the world’s fifth largest producer, had helped push the oil price higher.

Meanwhile, talk of a bid from Total of France for the ailing oil giant Royal Dutch/Shell, could add another dimension to the oil sector, already benefiting from high crude prices. Both companies declined to comment and Total’s shares eased 0.5 per cent to €156.50 and while Royal Dutch gained 1.4 per cent to €40.72 in Amsterdam.

Mr Chavez victory boosted Lufthansa on hopes it took the lid off simmering oil prices, lowering fuel costs as a consequence. The German airline rose 4 per cent to €9.17.

German bancassurer Allianz beat expectations with net profit in the three months to the end of June of €614m, down from €675m in the first quarter. But the consensus figure from analysts, according to Reuters, was around €589m. The bank division, home to the problematic Dresdner Bank, had net revenues of €3.3bn in the first half. Allianz gained 2.4 per cent to €76.21.

Re-insurers did not fare as well thanks to concerns over the impact of Hurricane Charley which devastated parts of Florida over the weekend, causing billions of dollars of damage. Converium dropped 4 per cent to SFr23.95 and Swiss Re fell 0.7 per cent to SFr67.75. Scor slipped 1.9 per cent to €1.05

Alfa Laval fell 8.2 per cent to SKr106 after second quarter profits at the Swedish engineering group were lower than expected. The main worry was over gross margins, which fell to 35.8 per cent from 39.2 per cent a year ago. The pretax profit of SKr259m was better than the comparative period’s SKr219m but below analysts’ forecasts of SKr288m.