European stocks rose after Saudi Arabia said it will boost oil production, allaying concern a high oil price will stymie economic growth. Carmaker DaimlerChrysler AG and chemicals company Akzo Nobel NV gained. The Dow Jones Stoxx 50 Index rose 0.9 percent to 2680.94 as of 9:27 a.m. in London. The Stoxx 600 advanced 0.8 percent. The Euro Stoxx 50, a benchmark for the 12 countries sharing the euro, climbed 0.8 percent. Carmakers and chemicals companies, whose sales tend to move with the economy, paced gains as the price of crude dropped for a third day. Oil climbed to record a week ago, fueling concern higher fuel costs will trim spending and raise corporate costs.
Lower oil prices ``help sentiment for stocks,'' said Frank Hogg, who helps manage the equivalent of $14 billion at Bank Hofmann AG in Duebendorf, Switzerland. ``They won't be a burden for the economy. Saudi Arabia's position more or less indicates that OPEC will increase oil production.'' DaimlerChrysler, the world's biggest maker of luxury cars, gained 1.9 percent to 35.67 euros. Akzo Nobel, the largest Dutch chemicals and drugmaker, gained 2 percent to 28.75 euros. Benchmark indexes rose in all 17 European markets, except Luxembourg and Italy. Germany's DAX Index added 1.3 percent. France's CAC 40 Index rose 0.5 percent. The U.K.'s FTSE 100 Index increased 0.5 percent. June futures on the Euro Stoxx 50 advanced 1.5 percent. Italy's MIB30 Index shed 0.9 percent. At least 50 Italian stocks start trading today without the right to their latest dividends. The benchmark's 10 worst performers today are among those companies.
Oil Price
New York crude for July delivery shed 1 percent to $39.55 in electronic trading. Oil futures touched a record $41.85 last Monday. Saudi Arabia, the world's biggest oil producer, pledged to boost output and proposed that other members of the Organization of Petroleum Exporting Countries raise the group's output quota by at least 8.5 percent. Saudi Arabia yesterday assured the U.S. that its request for increased oil supplies will be met, Energy Secretary Spencer Abraham told reporters.
Lufthansa Share Sale
Deutsche Lufthansa AG, Europe's third-biggest carrier, shed 5.9 percent to 11.39 euros after saying it will sell 76.3 million new shares to raise capital for new planes. The company plans to raise 752 million euros ($900 million) by offering stockholders one new share for every five held. EMI Group Plc lost 2.8 percent to 240 pence. The world's third-largest record company had a fiscal 2004 net loss of 71.6 million pounds ($128 million), compared with profit of 229.7 million pounds a year earlier, on the cost of cutting jobs and dropping artists. Interbrew SA rose 1.5 percent to 25.6 euros. The Belgian producer of Stella Artois and Rolling Rock beers will sell its 30 percent stake in FEMSA Cerveza to Fomento Economico Mexicano SA, Latin America's largest beverage company, for $1.25 billion.
Total SA, Europe's third-largest oil company, and Telecom Italia SpA, Italy's largest telephone company, paced declines on the Stoxx 50 as their shares traded without the right to the most recent dividends. Total fell 3.6 euros, or 3.3 percent, to 150.8 euros. Its shares start trading without the right to a 4.7 euro-a-share dividend today. Telecom Italia fell 6 cents, or 2.4 percent, to 2.49 euros and its mobile-phone unit, Telecom Italia Mobile SpA, lost 20 cents, or 4.4 percent, to 4.43 euros. Telecom Italia is paying a 10.4 cent dividend and the mobile unit has a 25.7 cent payout.///www.bloomberg.com