Global stocks slide as oil prices rocket to US$142

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

LONDON, June 27, 2008 (AFP) – European stocks mostly fell on Friday as oil prices shot to record levels, but losses were less than falls on other global markets hit by soaring crude costs and a weak US economy. Concerns are growing among investors that rising energy costs will fuel inflation and lead to higher interest rates worldwide, putting the brakes on global economic growth.

“Inflation risk has rapidly replaced credit risk as the predominant issue facing global financial markets,” said Barclays Capital analyst Larry Kantor.

“The effects of higher inflation are poised to work through the global economy in profound ways for the remainder of the year.”

Oil prices rose to record high levels close to 142 dollars a barrel on Friday.

In European stock market trade, the Paris CAC 40 index was down by 0.84 percent at 4,389.10 points approaching the half-way mark.

Frankfurt’s DAX 30 shed 0.75 percent to 6,410.97 points, but in London the FTSE 100 was up by 0.19 percent at 5,528.90 points.

Traders said the FTSE was in positive territory owing to large gains being won by heavyweight energy companies on the back of surging crude prices.

While higher crude costs hurt most companies,

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