Stocks fall while takeover bid puts shine on Bulgari

Eurostoxx 50:2,931.42 (–17.76) Frankfurt DAX:7,161.93 (–16.97) Paris CAC:3,990.41 (–29.80)

MOST EUROPEAN stocks retreated yesterday, as oil climbed above $105 a barrel amid escalating violence in Libya, while takeover activity boosted Bulgari and Tognum.

“Generally positive economic reports have been overshadowed by the increase in oil prices and the situation in the Middle East and Africa,” wrote Jean-Paul Jeckelmann, chief investment officer at Banque Bonhote and Cie in Neuchatel, Switzerland.

Oil rose to the highest in 29 months as fighting intensified in Libya, Africa’s third-largest crude producer. Libyan troops loyal to Muammar Gadafy used artillery and helicopter gunships in their effort to block the rebels’ advance west from the oil hub of Ras Lanuf toward the leader’s hometown of Sirte.

Clashes during the past two days have become more ruthless as the rebels moved along the Libyan coast toward Tripoli and government troops escalated their use of force in attempting to retake rebel-held cities.

Stocks fluctuated in Europe as Greece’s government bond rating was cut by Moody’s Investors Service to B1 from Ba1 and assigned a negative outlook.

Irish 10-year government bonds fell, sending the yield up as much as nine basis points to 9.477 per cent, the highest since before the euro was created in 1999.

Inmarsat retreated 13 per cent to 593p as fourth-quarter sales missed analysts’ estimates. Rio Tinto tumbled 2.4 per cent to 4,210p as a gauge of basic resources companies fell 1.6 per cent.

Bulgari rallied 59 per cent to €12.10. LVMH agreed to purchase the Bulgari family’s 50.4 per cent stake in the third-biggest jeweller for €1.87 billion in stock and will then make a tender offer for the rest. The takeover triggered buying across companies’ shares in the industry.

Cie Financière Richemont, the world’s largest jewellery maker, rallied 2.2 per cent to 54.70 Swiss francs and Swatch gained 2.2 per cent to 398.40 francs.

Burberry, the UK’s largest luxury retailer, rallied 3.6 per cent to 1,200p. Tognum surged 23 per cent to €22.775.

Intertek gained 5 per cent to 1,994p after revenue beat estimates and the company agreed to buy Moody International for about $730 million. – (Bloomberg)