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Oil stocks help European markets
LONDON, England (Reuters) -- European blue chips ground higher on Monday as high crude prices supported oil firms like Total and Italy's Eni. But trading was thin ahead of key indicators of the U.S. economy later in the week. By 1535 GMT, with most markets around Europe closed, the FTSE Eurotop 300 index of pan-European blue chips was up 0.4 percent at 873, while the narrower DJ Euro Stoxx 50 index rose 0.8 percent to 2,480. London and Paris added 0.7 and 0.6 percent respectively while the Swiss blue chip market ended flat. Frankfurt, the only market still officially trading, was up 0.5 percent. Advancing issues outpaced decliners by five to three but turnover remained light at 1.82 billion euros. Monday's gains were again led by oil majors as fresh concerns about supplies from Iraq and heavy buying from investment funds kept prices near five-month highs. Royal Dutch/Shell and Eni both climbed 2.5 percent and France's Total gained 2.1 percent. Travel and tourism stocks were also prominent, with Swiss International Air Lines surging 13 percent on speculation it will join the Oneworld alliance. Shares in Scandinavian airline group SAS gained 5.0 percent after it reported a small second-quarter profit on the back of restructuring and cost cutting. But airport operator BAA dipped 1.3 percent after it said a wildcat strike at London's Heathrow in July deprived it of its busiest month ever. Among others to lose ground, Dutch supermarket group Ahold continued to slide, as fallout from last week's sales data pushed the stock down 1.6 percent. Shares in Danish pharmaceutical firm Lundbeck fell as much as seven percent after a German rival accused it of industrial espionage. Lundbeck denied the accusations, and its shares closed 2.7 percent weaker. A rally in U.S. technology stocks helped underpin earlier gains in Europe, where tech issues in particular found favor after a period of softness. But with many investors on summer holidays and questions remaining over whether improving confidence will be translated into economic growth, analysts said making further big gains would be difficult. "I think that between now and September or October there's not going to be a lot of activity in equity markets. People are not going to be wanting more exposure until we see confirmation of a recovery," said Goldman Sachs chief European strategist Peter Oppenheimer. With investors hungry for any signs of economic improvement, the U.S. Federal Reserve Open Market Committee's (FOMC) assessment of the economy after its Tuesday monetary policy meeting is being keenly awaited. Although no change in benchmark rates is expected, analysts want to hear the Fed's take on the recent rout in bond markets and whether earlier calls for a modest recovery remain on target.
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