European stocks return to slippery slope

LONDON (AFP) - A brief surge for Europe's main stock markets came to a halt on Thursday, with share prices falling again as heavyweight energy stocks tumbled in London amid cooler oil prices.

French car giant Renault also fell in Paris, having risen sharply earlier Thursday in response to strong trading figures and a hard drive to raise profitability.

The group said it would cut overheads by 10 percent, and the CGT trade union forecast that it would shed 6,000 jobs in Europe.

The continent's biggest stock market indices had on Wednesday posted gains of more than 1.50 percent on average, powered by positive corporate results, notably in the banking and auto sectors, and in response to falling oil prices, dealers said.

By late morning trading here on Thursday, the FTSE 100 index of top companies had fallen by 0.50 percent to stand at 5,422.90 points.

Frankfurt's DAX 30 dropped 1.01 percent to 6,470.13 points nearing the half-way point as a weak business survey in Germany, Europe's biggest economy, dampened hopes of more hikes to eurozone interest rates, dealers said.

In Paris, the CAC 40 shed 0.66 percent to 4,379.51 points, while the Euro Stoxx 50 index of leading eurozone shares declined by 0.62 percent to 3,366.66.

The European single currency fell to 1.5683 dollars.

Wall Street stocks had risen modestly on Wednesday, while Japanese share prices closed up 2.18 percent to hit a one-month high on Thursday.

In Europe, energy majors paid the cost of slumping oil prices, which had tumbled by about four dollars on Wednesday. They were slightly higher on Thursday but still way off record highs of above 147 dollars a barrel reached earlier in July.

On London's FTSE 100, Tullow Oil shed 5.94 percent to 720 pence and Cairn Energy lost 5.70 percent to 2,459 pence.

In Paris, French car giant Renault fell 4.77 percent to 55.08 euros after the group said that it would slash its overheads by 10 percent.

In initial trading, Renault shares had jumped 6.85 percent, before reversing direction in midday trade. Renault's losses meanwhile weighed on French rival Peugeot, which dropped 3.93 percent to 33.53 euros.

European investors were also digesting news that German business sentiment had plunged to a 34-month low point in July, underscoring that high oil prices and a strong euro were throttling the country's economy.

The monthly business climate index calculated by Munich-based economic research institute Ifo fell to 97.5 points from 101.3 points in June.

The last time it was below that level was in September 2005.

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