Shares fell around the world on Wednesday, as investors watched oil prices surge amid worries about Hurricane Rita.
In London, the Financial Times-Stock Exchange 100 index fell 46.70 to 5369.70. 85 FTSE stocks fell and 16 rose on turnover of 1,916,000,000 shares. Business Post Group fell after the company said it expects fiscal 2006 pretax profit to fall substantially from last year. Aegis Group rose on a published report that the company received a takeover offer from France's Publicis Group. Jessops fell as the company said sales in stores open at least a year fell 2.6% in the 25 weeks through Sept. 18. Kelda Group fell after Lehman Brothers cut its recommendation on the shares to "equal weight" from "overweight". Sanctuary Group fell after the company said it will miss analysts' full-year earnings estimates.
Frankfurt's DAX Index skidded 87.64 to 4875.22. The RWI economic institute lowered its German growth forecast to 0.9% from 1.0% this year, and 1.4% from 1.8% next year, due to higher oil prices and political uncertainty. 28 DAX stocks fell and 2 rose on turnover of 137,198,218 shares. Bayer and BASF fell as higher oil prices raised production costs. Thiel Logistik fell as the company abolished its management board and made its board of directors responsible for oversight and management of the company. Volkswagen rose as its Audi unit began talks with Skoda Auto to build its A4 range of luxury sedans in India.
France's CAC 40 fell 63.74 to 4468.06. Traders ignored a report that French consumer spending rose 1.9%, the largest increase in 16 months. 38 CAC stocks fell and 2 rose on turnover of 128,993,102 shares. Danone fell after CEO Riboud said the company is not in merger talks with PepsiCo. Publicis fell on a published report that the company is preparing a takeover bid for Britain's Aegis. Sanofi fell after the European Medicines Agency suspended its Hexavac drug on fear of low protection against hepatitis B. Gaz de France rose as earnings beat estimates. Ipsos rose on higher first half earnings and improved guidance.
Asian shares were mixed. Japan's Nikkei 225 rose 48.00 points (0.37%) to 13,196.57, amid continuing optimism about the country's economic growth and reform prospects. Also, foreign investors sought higher returns outside the U.S. and major European markets. The broader market showed weakness, however, with declining issues on the first section of the Tokyo Stock Exchange outpacing advancing issues by 867 to 692.
Hong Kong's Hang Seng fell 18.24 points (0.12%) to 15,223.62. The Hong Kong Monetary Authority raised its benchmark rate by 25 bps to 5.25%, matching the Federal Reserve's hike in the federal funds rate. Hong Kong generally keeps pace with U.S. interest rates since its currency is pegged to the greenback.