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Market Update

European Markets Ease 1% on Second Day Decline in Commodities

Author: Nigel Thomas
Last Update: 10:19 AM ET December 08 2015

4:00 PM Frankfurt – European market indexes dropped more than 1% led by a second-day decline in energy and resource complex stocks. Anglo American suspended its dividend for the second-half of the year. Enquest approved a $125 million project in the North Sea. Schaffner profit tumbled 50%.

European stock markets continued to slide on Tuesday as oil prices reached seven-year lows, while resource companies fell on concerns about demand from China.

China''s exports fell 6.8% in November from a year earlier, China''s General Administration of Customs reported. The results indicate the fifth consecutive monthly decline due to weaker global demand.

With better-than-expected imports, China’s trade surplus narrowed down to $54.1 billion in November from $61.6 billion in October.

Oil and gas shares declined after the robust supply, decided on the recent OPEC meeting, sent oil prices near seven-year lows below $40 a barrel in New York and below $42 a barrel in London.

In London trading, FTSE 100 index dropped 72.72 or 1.2% to 6,150.94 and in Frankfurt the DAX index slumped 162.82 or 1.5% to 10,721.49.

In Paris, CAC 40 index declined 63.03 or 1.3% to 4,693.38.

Air France KLM SA was little changed at €6.42 despite the news that the Paris attacks led to a €50 million drop in November revenues on the air traffic decline.

The airline also said it remained on track to meet 2015 targets because current booking trends were in-line with a progressive recovery.

Anglo American Plc tumbled 10% to 332 pence after the miner said it would suspend its dividend for the second half of the year.

The mining company also announced restructuring plans, which would consolidate its six business units into three and the miner plans to sell more assets.

BHP Billiton erased 6% to 720 pence as it became clear that the company faces a civil lawsuit and potential charges of $5.31 billion after the dam disaster at its Brazilian iron ore mine.

EnQuest Plc soared 4.6% to 20.14 pence after the oil and gas producer surprised investors by approving the development of a $125 million oil project in the North Sea.

The company said the Scolty/Crathes field would leverage existing infrastructure at low upfront costs. The field is expected to deliver oil in the first-half of 2017.

EnQuest revised its full-year capital expenditure to increase to $750 million from the previous forecast of $600 million. Net debt is expected to rise to $1.55 billion at the end of the year.

Schaffner Holding AG slipped 1.2% to 221.30 Swiss francs after the Switzerland-based electronic systems maker said sales in the year ending in September declined 5.9% from a year ago to 201.8 million francs.

Net profit for the period tumbled 50% from a year ago to 6.3 million francs and diluted earnings per share dropped to 9.90 francs from 19.77 francs.

The result includes one-time expenses of 2 million Swiss francs for strategy review and implementation.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc