European Stocks, U.S. Index Futures Drop; Asian Shares Advance

By Michael Patterson

Nov. 28 (Bloomberg) -- European stocks declined, trimming the MSCI World Index’s biggest weekly gain on record, as STMicroelectronics NV cut its sales forecast and lower oil and metals prices weighed on commodity producers. Asian shares rose, while U.S. index futures dropped.

STMicroelectronics, Europe’s largest chipmaker, sank 5.8 percent, dragging down rivals Infineon Technologies AG and Intel Corp. StatoilHydro ASA retreated 2.9 percent and Anglo American Plc lost 4.4 percent as crude slid below $53 a barrel and copper fell more than 2 percent. Komatsu Ltd. increased 6.9 percent in Tokyo on speculation China’s interest-rate cut this week will boost demand for its excavators.

Europe’s Dow Jones Stoxx 600 Index slipped 1 percent to 201.68 at 12:22 p.m. in London, limiting the measure’s rebound from a five-year low on Nov. 21 to 11 percent. Raw-materials producers, insurers and banks led the gain this week on speculation government stimulus packages in Europe and the U.S. will cushion economies from the financial crisis. The index is still down 9.2 percent in November.

“I am not in the camp saying the world is completely going to end,” Andy Lynch, who oversees about $10 billion as a fund manager at Schroder Investment Management Ltd. in London, said in an interview on Bloomberg Television. “Monetary policy and fiscal policy is being eased aggressively, but it won’t have an effect in the next six months.”

The rally in global stocks this week pushed the MSCI World Index up 11 percent, poised for the biggest weekly gain since record began in 1970. The gauge of 23 developed markets has dropped 7.4 percent this month and is down 45 percent in 2008.

Asia, U.S. Futures

The MSCI Asia Pacific Index rose 1.5 percent. Futures on the Standard & Poor’s 500 Index expiring in December decreased 0.9 percent as Exxon Mobil Corp. dropped.

U.S. exchanges were closed yesterday for the Thanksgiving holiday and will be open for a shortened trading session today. The S&P 500 has advanced 11 percent since Nov. 21.

The Bombay Stock Exchange Sensitive Index climbed 0.7 percent in the first day of trading after India’s first terrorist attack against foreigners. Exchanges were shut yesterday after militants stormed into the Taj Mahal Palace and Tower hotel and the Oberoi Trident complex. At least 121 people were killed and 279 injured.

The Dubai Financial Market General Index lost 34 percent this month and Bulgaria’s SOFIX Index retreated 26 percent for the steepest declines among 90 benchmark indexes tracked by Bloomberg. Ukraine’s PFTS Index added 14 percent and China’s CSI 300 Index increased 10 percent for the biggest gains.

STMicroelectronics

STMicroelectronics slid 5.8 percent to 5.13 euros today. The company said revenue will be $2.2 billion to $2.35 billion, down from $2.7 billion in the previous quarter. That equals a decline of 13 percent to 18 percent, the company said. An earlier prediction was that sales would be unchanged to down 8 percent.

Intel, the world’s largest chipmaker, fell 1.1 percent to $13.82 in German trading. Infineon, Europe’s second-biggest maker of semiconductors, dropped 7 percent to 1.795 euros.

Crude oil for January delivery sank as much as $1.82, or 3.3 percent, to $52.62 a barrel in New York on speculation a potential OPEC production cut to support prices may fail to outweigh declining fuel demand amid the global recession.

StatoilHydro, Norway’s largest oil and gas company, retreated 2.9 percent to 119.5 kroner and Total SA slipped 1.8 percent to 41.40 euros. Exxon Mobil Corp., the world’s biggest oil producer, fell 1.4 percent to $79.72 in German trading.

Anglo American, which mines copper and platinum, lost 5.5 percent to 1,486 pence. Freeport-McMoRan Copper & Gold Inc. of the U.S. retreated 1.5 percent to $24.95 in German trading.

Metal Prices

Copper declined 2.5 percent on the London Metal Exchange, while platinum, nickel, tin and zinc also dropped.

In Asia, Komatsu gained 6.9 percent to 1,144 yen. Aluminum Corp. of China, the country’s largest producer of the metal, rose 4.9 percent to HK$3.46. China’s central bank cut interest rates by the most in 11 years, three weeks after the government announced a stimulus plan worth more than $500 billion.

Royal Bank of Scotland Group Plc investors took 0.2 percent of shares offered in the U.K.’s biggest bank bailout, leaving the government with almost 20 billion pounds ($31 billion) of stock and a majority stake. Investors bought almost 56 million shares at 65.5 pence apiece, the bank said. The U.K. government, which underwrote the offering, will buy the remaining ordinary shares for a total stake of 58 percent. The shares dropped 3.3 percent to 53.2 pence today.

Commerzbank AG climbed 4.9 percent to 7.22 euros after Germany’s second-biggest lender sped up its takeover of domestic competitor Dresdner Bank by as much as a year in a revised purchase valued at 5.1 billion euros ($6.6 billion).

U.S. retailers opened their doors at midnight and discounted merchandise as much as 70 percent to counter what may be the weakest holiday shopping season in six years. Individuals may spend an average of $616 on holiday gifts this year, down 29 percent from a year earlier, according to a Gallup Inc. poll.

To contact the reporter on this story: Michael Patterson in London at mpatterson10@bloomberg.net.