Soaring Energy Prices Hurt Chemical Makers EUROPE MARKETPLACE By Bloomberg
Posted on: Wednesday, 18 January 2006, 12:00 CST
By Chris Fournier
European stocks dropped Tuesday as high oil prices hurt chemical makers.
"It won't be as easy for stocks as in 2005," said Andreas Gartner, a fund manager at SEB Investment-Fonds in Frankfurt. "We'll have oil scarcity for the next months and years. There's no spare capacity."
The Dow Jones Stoxx 600 index lost 2.33 points to 315.24. All but one of 18 industry groups slid. The Stoxx 50 dropped 27.62 points to 3398.12, and the Euro Stoxx 50, a gauge for the 12 countries using the euro, fell 34.34 points to 3,610.07.
European benchmarks this month reached their highest since 2001 on speculation that earnings growth would continue even as oil and interest rates keep rising.
The Stoxx 600 advanced 24 percent last year, the best annual performance since 1999.
Clariant, the large specialty chemical maker, fell 40 centimes to 19.10 Swiss francs. Oil makes up 60 percent of chemical makers' total costs, and oil prices are 34 percent higher than a year ago.
The price of crude oil was rising on concern over supplies from Nigeria and Iran, which produce 7.5 percent of world output. British Airways dropped 5 pence to 324 pence.
Benchmarks fell in all 18 West European markets except Greece. Germany's DAX slid 54.48 points to 5460.16. France's CAC 40 fell 48.95 points to 4807.14. Britain's FTSE 100 dropped 41.20 points to 5699.00.
Source: International Herald Tribune
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