Europe higher on auto, oil stocks

Tuesday, December 31, 2002 Posted: 1:29 AM HKT (1729 GMT)

LONDON, England (CNN) -- European markets ended higher on Monday, led by auto and oil stocks, although many investors kept to the sidelines ahead of the New Year break, amid mounting military tension around the world.

London's FTSE 100 was up 1.86 percent to 3,900.2, while the CAC 40 blue chip index in Paris gained 0.4 percent to 3,025.14. Frankfurt's electronically traded Xetra Dax, which closed at 1300 GMT for the New Year holiday, finished up 1.8 percent at 2,892.63.

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was up 1 percent.

Oil stocks were moved higher as crude hit new two-year highs on Monday as concern grew over a possible U.S.-led attack on Iraq, and a strike in Venezuela, the world's fifth-largest oil exporter, dragged on. (Full story)

"Oil and politics are a volatile combination and we have two separate issues confronting the oil market at the moment," Peter Gignoux, head of the London energy desk at Schroder Salomon Smith Barney, told Reuters.

Brent crude oil for February delivery, the London benchmark, was up 50 cents to $30.66 at closing.

The UK's BP (BP) was up 2.2 percent to 424 pence, while Shell Transport & Trading (SHEL), which owns 40 percent of Royal Dutch/Shell Group, was up 0.6 percent to 403.75 pence in London and Royal Dutch, which owns the remainder, was also up 1.5 percent to 42.52 euros in Amsterdam.

Italy's ENI, Europe's fourth-largest oil producer, rose 1.7 percent to 15.15 euros and France's TotalFinaElf (PFP) added 1.9 percent to 135.50 euros.

But British defence firm BAE Systems (BA-) dropped 3.5 percent to 122 pence after news on Friday that it had lost out on a Polish defence contract to United States rival Lockheed Martin. Uncertainty about contracts with the UK government has also dogged BAE shares in recent weeks.

U.S.-German carmaker DaimlerChrysler (FDCX) gained 3.3 percent to 29.35 euros after the head of its luxury Mercedes unit was quoted as saying he expected to have at least matched last year's 1.2 million sales of Mercedes and Smart brand cars in 2002. (Full story)

The German markets also received a lift from the electronics and engineering giant Siemens (FSE). Its shares were up 1.5 percent to 40.60 euros after Chief Executive Enrich Avon Pierre told Reuters he was satisfied with the company's mobile phone business in its first quarter, and said he was confident of more deals to build Trans rapid trains in China. (Full story)

Meanwhile, UK pharmaceutical group GlaxoSmithKline (GSK) rose 1.3 percent to 11.35 pence after it said that a U.S. judge had ruled one patent related to its top-selling anti-depressant Pail was invalid, but supported another. (Full story)

The beverage sector was also up with UK drinks giant Diageo (DGE), the world's biggest spirits group, gaining 3.1 percent.

German steel and engineering group Thyssenkrupp (FTKA) was among Europe's top gainers, adding 6.2 percent to 10.65 euros on reports the Chinese government was close to deciding on a second Transrapid high speed railway, which it would help build.

The AEX index in Amsterdam was up 0.8 percent, Milan's MIB30 index rose 0.4 percent and the SMI in Zurich gained 1.2 percent.

In the U.S. on Monday, stocks climbed in and out of the negative column in early trading as investors warily digested several gloomy economic reports coupled with more news of bleak holiday sales for retailers.

The Dow Jones industrial average was up 9.12 points to 8312.9, while the Nasdaq composite lost 1.80 points to 1346.51 and the Standard & Poor's 500 index climbed 1.19 points to 876.59.