European Stock-Index Futures Decline; BHP, Rio Tinto May Fall

By Sarah Jones

Aug. 4 (Bloomberg) -- European stock-index futures fell, following declines in Asia. BHP Billiton Ltd. and Rio Tinto Group may lead commodity producers lower after copper retreated.

HSBC Holdings Plc may be active as Europe's largest bank reports first-half earnings. Fortis will probably move after the Belgian financial-services firm posted second-quarter profit that beat analysts' estimates. Air Liquide SA might also be active after the chemical maker's earnings topped estimates.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, slipped 7, or 0.2 percent, to 3,319 at 7:40 a.m. in London. The U.K.'s FTSE 100 Index might fall 8, according to BCG Partners.

``We are looking for a fairly flat start in Europe,'' said Manus Cranny, a London-based analyst at MF Global. ``All eyes will be on HSBC. The bank is seen as the bellwether in regards to subprime and the U.S. housing market.''

The Dow Jones Stoxx 600 Index has slumped 23 percent this year as a slowdown in economic growth and $481 billion of asset writedowns and credit losses worldwide prompted analysts to cut earnings estimates.

U.S. stocks last week fell after General Motors Corp.'s earnings disappointed investors and crude oil rallied. Asian stocks declined today, led by automakers after Nissan Motor Co. and Olympus Corp. said their earnings dropped.

Profits at Stoxx 600 companies may drop 2.5 percent on average in 2008, according to projections tracked by Bloomberg. That's down from a forecast for 11 percent growth in January.

BHP, HSBC

BHP, the world's largest mining company, retreated 2.1 percent in Sydney, while Rio Tinto, the world's third-biggest mining company, declined 5.5 percent.

Metal prices fell on Aug. 1, partly on speculation that demand from automakers will drop. Prices were little changed in Asia today.

HSBC may be active. Europe's biggest bank by market value may report today its worst decline in profit since 2001 as costs for bad U.S. loans increased. First-half net income probably dropped 33 percent to $7.34 billion from a year earlier, according to the average estimate of 11 analysts surveyed by Bloomberg.

Fortis, which ousted its chief executive officer last month, said second-quarter profit fell 49 percent to 830 million euros ($1.29 billion) after it added to credit-related writedowns.

That still beat the 692 million-euro median estimate of 12 analysts surveyed by Bloomberg. Fortis wrote down 342 million euros on structured investments, adding to first-quarter markdowns of 380 million euros. The company also took charges related to buying part of ABN Amro Holding NV last year.

Air Liquide

Air Liquide, the world's biggest maker of industrial gases, said first-half profit rose 8.1 percent to 601 million euros on higher demand for hydrogen used to make cleaner gasoline and contracts in Asia.

Analysts estimated 575 million euros according to a Bloomberg survey. Revenue gained 13 percent.

Imperial Energy Corp. might climb after the Sunday Telegraph reported China Petroleum & Chemical Corp. offered to buy the U.K. company. The newspaper did not say where it obtained the information.

Imperial Energy has allowed Sinopec, as China Petroleum is known, to begin due diligence by providing access to data, the Sunday Telegraph said.

Imperial Energy said in a statement today that it has received another approach in relation to a possible cash offer for the company.

British Energy

British Energy Group Plc might be active after the Sunday Telegraph reported Centrica Plc may revive a 22.5 billion-pound ($45 billion) all-stock merger plan with the U.K. utility. The newspaper cited people close to the company.

Calls made to the Centrica press office were not immediately returned. Martin Pearce, a spokesman for British Energy, declined to comment.

Delhaize Group, the Belgian owner of the U.S. Food Lion supermarket chain, said second-quarter profit rose 43 percent to 116.3 million euros after being held back a year earlier by expenses for repurchasing debt.

That topped the 92 million-euro median estimate of five analysts in a Bloomberg survey. Earnings were hurt by 62.5 million euros of costs for a $1.1 billion debt buyback in 2007's second quarter.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.