Europe gains after BP earns beat forecasts | 6abc.com | 6abc Philadelphia

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By 6abc

Tuesday, October 27, 2009

LONDON - October 27, 2009

In morning European trading, Britain's FTSE 100 rose 0.3 percent to 5,206.67, Germany's DAX added 0.2 percent to 5,655.11 and France's CAC 40 climbed 0.2 percent to 3,752.07.

Major Asian markets dropped by around 2 percent or more, with shares in resource companies hit after a steep fall in commodity prices, and U.S. indexes were expected to open flat.

In London, BP PLC gained 4 percent after it reported a 34 percent fall in third-quarter profit to $5.3 billion, as oil and gas prices fell from record levels a year earlier.

The figure from Europe's second-largest oil company compared with an $8.0 billion profit in the third quarter of 2008, but was up from $4.4 billion in the second quarter and well ahead of analysts' forecasts.

"The fall in earnings was well trailed, but the numbers nonetheless have obliterated market forecasts, as evidenced by the spike in the share price in early trade," said Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers.

Other oil stocks Total and Shell added 2.1 percent and 1.4 percent, partially offsetting weakness in financials.

In Asia, investors unloaded shares after U.S. markets got pounded as the dollar strengthened and anxiety grew about the market overheating, given the troubles still facing major Western economies and a number of financial companies.

Some analysts said the markets, up massively since March, could get more choppy even if they continued to advance.

"The market has gotten high enough, so there's some profit taking right now," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "The summer rally seems to be over, and I think we're facing a cold winter."

Wall Street was set to open flat. Dow Jones industrial average futures rose 0.04 percent to 9,845, while Standard & Poor's 500 futures slipped 0.03 percent to 1,066.10.

Investors were expected to focus on Standard & Poor's/Case-Shiller August index of home prices, due at 1300 GMT (9 a.m EDT), and U.S. Consumer Confidence figures for October, at 1400 GMT (10 a.m EDT).

In Japan, the benchmark Nikkei 225 stock index lost 1.5 percent to 10,212.46 points. Hong Kong's market, which was closed Monday, dropped 1.9 percent to 22,169.59.

China's Shanghai market led Asia's declines, tumbling 2.8 percent to 3,021.46. Australia's market lost 1.6 percent and India's Sensex was 2 percent lower.

South Korea's Kospi shed 0.5 percent to 1,649.53 a day after new figures showed the country's economy, Asia's fourth largest, expanded at its quickest pace in seven years in the last quarter.

In the U.S. overnight, the Dow fell 1.1 percent to 9,867.96.

The broader Standard & Poor's 500 index fell 1.2 percent to 1,066.95. The index, which is the basis for many mutual funds, is down 2.8 percent from its recent peak a week ago.

Oil prices lingered below $79 a barrel Tuesday in Europe after three days of losses as investors eyed a volatile U.S. dollar. Benchmark crude for December delivery rose 28 cents to $78.96; the contract fell $1.82 overnight.

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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.