European Stocks Hit By Rising Oil Prices

LONDON, Sept 23 (AFP) - European stock markets retreated in early trading on Thursday after a surge in oil prices rattled investors on both sides of the Atlantic, hitting auto stocks in particular.
The London FTSE 100 index lost 0.53 percent to 4,567.80 points, the Frankfurt DAX 30 lost 0.90 percent to 3,906.99 points and the Paris CAC 40 shed 0.88 percent to 3,659.50 points.
The DJ Euro Stoxx 50 index of leading eurozone shares declined 0.85 percent to 2,736.28 points.
The euro stood at 1.2309 dollars.
European markets shadowed Wall Street lower after US shares slumped Wednesday as dealers showed concern at a fresh surge in oil prices and prospects for the upcoming corporate earnings season.
The Dow Jones Industrial Average tumbled 1.33 percent to 10,109.18 points and the Nasdaq lost 1.85 percent to 1,885.71 points.
The broad-market Standard and Poor's 500 index retreated 1.39 percent to 1,113.56 points.
"Whenever Wall Street reacts negatively that tends to influence all these other markets," said Mike Lenhoff, chief strategist at Brewin Dolphin Securities.
"The UK and Europe are still reasonably firm but I doubt whether they can make a great deal of progress independently of Wall Street.
"Oil prices are still an issue. I don't think oil prices at these levels are going to be crippling to the economy, but they are still a concern," he added.
European auto stocks were under pressure after Peugeot's chief executive Jean-Martin Folz said at the Paris Car show that he saw "no signs" of any upturn in demand in the European auto market in 2004, dealers said.
"Folz's cautious comments and rising oil prices are putting pressure on the car sector," one Paris dealer said.
In Paris Peugeot shares fell 3.09 percent to 49.81 euros and Renault dropped 1.28 percent to 65.75 euros.
In Frankfurt BMW lost 2.07 percent to 33.54 euros, VW shed 1.38 percent to 31.47 euros and DaimlerChrysler fell 1.26 percent to 33.83 euros.
In London shares in British-based brewer SABMiller rose 0.21 percent to 718 pence as the group's trading update cheered investors.
The group said trade over the past five months had been strong with worldwide lager volumes up four percent.
But Shell shares lost 1.67 percent to 411 pence amid negative comment from analysts on a strategic update from the oil giant unveiled a day earlier.
Deutsche Bank cut its stance to "hold" from "buy", while reducing its recommendation on the sector to "neutral" from "overweight".
Shell announced plans to invest 45 billion dollars over three years and sell assets worth up to 12 billion to boost exploration in the wake of the restatement of its energy reserves.
"In a presentation that was strong on industrials, but tougher on financials, Shell's investment case has moved from reserves controversy, to a two-three year industrial recovery story," Deutsche Bank said.
In Asia Thursday, Japanese markets were closed for a national holiday. The Hong Kong Hang Seng Index closed up 0.06 percent at 13,280.43 points.