European Midday Update: Oil Stocks Drag Down Europe's Markets

Investors take profits in oil shares ahead of OPEC meeting; falls in BT, Vodafone also weigh on the market.
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LONDON -- After pushing tentatively higher at the open, the FTSE 100 turned tail as investors began taking profits in the index's two big oil stocks. By midday, the FTSE 100 was down 51 points at 6639.

BP

fell 8.5p to 653 ($9.27) and

Shell

eased 9.5 to 606.5, ending an exceptional run of late on the back of firmer crude prices. But with

OPEC

about to start its latest summit in Vienna, it is inevitable that investors would show signs of nervousness. Saudi Arabian Oil Minister Ali Naimi has said that OPEC would try to bring oil prices back below $28 a barrel. Talk is that Saudi Arabia will propose a production hike of 700,000 barrels per day.

Falls in

British Telecom

(BTY)

and

Vodafone

(VOD) - Get Report

also weighed on the market. BT was down 19p to 814 and Vodafone fell 5p to 286.

However, these losses were extremely modest when compared with those suffered by hotel and catering group

Granada Compass

. The shares plunged in high volume to 687p, before recovering partially to stand at 736p, a fall of 5.25%. The company has attracted several poor brokerage notes, but traders say that it is the adoption of Compass' accounting methods by the group that has led to today's carnage.

The slide had a knock-on effect on its

Granada Media

subsidiary, which fell an almost identical percentage amount to its parent. The shares are now down 35p at 590.

The

Techmark 100

got off to a good start on the back of a decent overnight rise in the

Nasdaq

though it has since slipped back to stand up just 12.21 points at 4037.41.

Semiconductor designer

ARM Holdings

(ARMHY)

reached an intraday high of 815p before easing back to stand 2p lower at 788.5, while

Marconi

was down 2p to

11.79.

Bookham Technology

(BKHM)

rose to

39.40, a gain of 75p.

On the Continent oil stocks also fell, dragging down the rest of the market.

Total Fina Elf

fell 5.80 euros to 178.20.

The

CAC 40

in Paris was down 48 points at 6786 and the

Xetra Dax

in Frankfurt was down 43 points at 7330. The Neuer Markt's tech-heavy

Nemax 50

index was 31.6 higher at 6395.8.

Internet firms

World Online

and

Tiscali

rose following Thursday's announcement that Tiscali will buy the Dutch Internet service provider in an all-stock deal for 5.9 billion euros. By midday, World Online was up 1.80 euros at 17.60 and Tiscali was up 3.03 euros to 48.90.