Stocks battered by US losses, oil price spike

LONDON (AFP) - European stock markets tumbled in early trading in the wake of steep losses in New York and Asia and a fresh surge in oil prices to record high levels.
The London FTSE 100 index sank 1.30 percent at 4,555.30 points, the Frankfurt the DAX dropped 2.06 percent to 3,854.24 points and the Paris CAC 40 lost 1.86 percent to 3,618.42 points.
The DJ Euro Stoxx 50 index of leading eurozone shares declined by 1.84 percent to 2,737.57 points.
The euro rose to new eight-month highs above 1.28 dollars, before easing back to 1.2786 dollars.
"Sentiment's been deteriorating for a while," said Stephen Ford, investment manager at Brewin Dolphin Securities.
"The oil price is obviously a factor. Looking ahead to next year, that's bound to have some effect on profit margins."
The deadlocked race for the White House was also unsettling investors, with George W. Bush seen as the market's favourite.
"We've got the US election looking like a very, very close race," noted Ford. "People say that a Bush victory would help the market. I'm less optimistic about that."
In New York shares ended last week with heavy losses, leaving the Dow Jones Industrial Average nursing a loss of 1.09 percent at 9,757.81 points at Friday's closing bell, its lowest closing level November 10, 2003.
The technology-rich Nasdaq composite shed 1.97 percent to 1,915.14 points and the broad market Standard and Poor's 500 index lost 0.97 percent to 1,095.74 points.
Equities sank as the New York oil price pushed further into uncharted territory, closing the week at a record 55.50 dollars a barrel.
New York's main contact, light sweet crude for delivery in December, hit a new all-time high of 55.67 dollars a barrel in electronic trading Monday, before retreating to 55.16 dollars, down one cent from Friday's close.
Prices scaled new peaks on fears of a total shutdown in Norway's oil production after oil sector shipowners threatened to stage a lock-out to end a strike that has weighed on the industry since July.
In Tokyo the Nikkei-225 index lost 1.82 percent to 10,659.15 points as a deadly earthquake in Japan, the worst in a decade, added to market worries about US equity losses and record high oil prices.
In Hong Kong the Hang Seng Index closed down 1.51 percent at 12,818.10 points.
In Europe, auto industry stocks were particularly hit on worries about rising raw material prices and the weaker dollar, dealers said.
Michelin fell 1.76 percent to 40.28 euros in Paris, Renault was down 1.95 percent at 62.95 euros and Peugeot declined 2.09 percent to 46.96 euros.
Marks and Spencer shares slipped 0.56 percent to 355 pence in London as investors warmed to the final details of the troubled retailer's buyback programme, which will see 635 million shares -- around 27.9 percent of its issued capital -- bought back at 362 pence.
AstraZeneca fell 1.23 percent to 2,170 pence after the drug giant revealed new accounting standards will knock two cents off its already reported earnings per share for 2003, making it 1.76 dollars rather than 1.78.
Manchester United shares fell back 1.06 percent to 280.75 pence after the football club said it had ended takeover talks with US sports tycoon Malcolm Glazer and would reject an offer if based on the current informal proposal.

10/25/2004 - 12:14 GMT - AFP