By Adam Haigh
Sept. 3 (Bloomberg) -- Stocks in Europe and Asia dropped on concern slowing economic growth will curb earnings at retailers and commodity producers as credit-market losses among financial firms increase. U.S. index futures declined.
Carrefour SA, the world's second-largest retailer, fell 2.4 percent after a report showed retail sales in Europe unexpectedly slipped in July. Cnooc Ltd., China's biggest offshore oil explorer, tumbled 6 percent as oil retreated for a fourth day. Barclays Plc slid for the first time in six days as Royal Bank of Scotland Group Plc said Barclays may have to raise more capital.
The Dow Jones Stoxx 600 Index lost 1.4 percent to 286.09 at 1:20 p.m. in London. The MSCI Asia Pacific Index dropped 0.5 percent, as did futures on the Standard & Poor's 500 Index expiring in September.
``There are maybe some more capital increases to come'' for financial firms, said Philippe Gijsels, Brussels-based senior equity strategist at Fortis Global Markets with $62 billion under management. ``We would stay very cautious on everything that is commodity-related,'' he said in a Bloomberg Television interview.
The MSCI World Index has declined for three straight days this week following a 1.6 percent drop in August. The measure is down 17 percent this year as the global economy cooled and the world's largest banks posted writedowns and credit losses of more than $500 billion.
Reports today showed consumer spending, company investment and exports fell in the second quarter, dragging the European economy into a 0.2 percent contraction and pushing it to the brink of a recession.
Hedge-Fund Collapse
Ospraie Management LLC, the investment firm run by Dwight Anderson, said yesterday it will close its biggest hedge fund after slumping 38.6 percent this year because of bad bets on commodity stocks.
Next Plc, Tesco Plc and Vodafone Group Plc helped send the U.K.'s FTSE 100 Index to a 2.1 percent drop, the steepest slump in two weeks. British consumer confidence held at the lowest level in at least four years in August after economic growth stalled, Nationwide Building Society said today.
Carrefour sank 2.4 percent to 36.21 euros. Next, Britain's second-biggest clothes retailer, retreated 5.3 percent to 1,073 pence. Tesco, the largest retailer in the U.K., slipped 2.9 percent to 384.9 pence.
Crude oil retreated for a fourth day as Hurricane Gustav caused minimal damage to refineries and rigs in the Gulf of Mexico and a strengthening dollar curbed the appeal of commodities as an inflation hedge.
Oil Companies
Cnooc tumbled 6 percent to HK$10.70 in Hong Kong. Inpex Holdings Inc., Japan's largest oil explorer, lost 3.9 percent to 1.025 million yen.
``Oil stocks are still suffering from the decline in the oil price,'' said Chicuong Dang, an analyst at Richelieu Finance in Paris, which has about $6.2 billion under management. ``The sentiment on oil is negative,'' he said in a Bloomberg Television interview.
Shares in the U.S. fell yesterday as a slump in commodity producers overshadowed gains in airlines and consumer companies after crude sank to a five-month low.
Barclays retreated 4 percent to 349 pence. Royal Bank of Scotland said the bank may need to raise as much as 7.5 billion pounds ($13.3 billion) to bring its capital ratio in line with investment banking peers. The shares were downgraded to ``sell'' from ``hold.''
The New York-based Ospraie Fund fell 26.7 percent in August after a ``substantial sell-off'' in energy, mining and resource equity investments, Anderson said in a letter to investors yesterday. Jonathan Gasthalter, a spokesman for Ospraie, declined to comment.
HBOS, Natixis
HBOS Plc, the U.K.'s biggest mortgage bank, lost 3 percent to 300.75 pence. Paris-based Natixis SA retreated 3.9 percent to 5.85 euros.
Theolia SA sank 7.3 percent to 13.02 euros. The French wind- power company part-owned by General Electric Co. had a first-half loss and cut its full-year target for operating profit.
Vodafone lost 2.2 percent to 141.1 pence after Credit Suisse Group AG cut its recommendation on shares of the world's biggest mobile phone company to ``neutral'' from ``outperform.''
``We believe Vodafone is likely to slightly miss its new revenue guidance on an underlying basis,'' analysts Justin Funnell and Paul Sidney wrote in a report.
Punch Taverns Plc slumped 17 percent to 264.5 pence after the U.K.'s largest pub owner scrapped its dividend as revenue drops. Enterprise Inns Plc, Britain's second-biggest pub landlord, tumbled 13 percent to 266.25 pence.
Michelin & Cie. climbed 2.9 percent to 50.48 euros. The world's second-largest tiremaker was upgraded to ``outperform'' from ``underperform'' at Credit Suisse, which cited ``margin stability'' and lower oil prices.
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net
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