European Stocks Rise Led By Oil Producers, Miners

January 5, 2009 6:23 a.m. EST

London, England (AHN) - European shares trade higher in morning session on Monday led by resources firms and energy sector in the region as oil jumped on NYMEX in electronic trading. While, automakers suffered a blow on a few downgrades.

Investors in Europe reacted positively as deteriorating global economy of the euro-zone fail to slowdown the rise of the oil prices as they rebound towards $48-a-barrel mark.

The pan-European Dow Jones Stoxx 600 moving higher by 1.34 percent to 204.46 points on Monday at 11:19 a.m. GMT, reducing the year-to-year losses to 41.13 percent from 2008-2009.

At 10:18 a.m., in early morning trade session, London's FTSE 100 index was trading higher by 15.93 points or 0.35 percent at 4,577.72 points. Frankfurt's DAX was moving up by 15.17 points or 0.31 percent at 4,988.24 points.

At the same time, the CAC 40 in Paris was trading down by 7.42 points or 0.22 percent at 3,342.27 points.

In the resources sector, shares of Rio Tinto Group, the third largest mining company in the world, continued its upward movement from last week as it increased by 4.1 percent on Monday.

BHP Billiton Ltd., which is the world's largest mining company, surged by as much as 1.1 percent in London trading as metals including copper, lead, tin and zinc increased on the London Metal Exchange.

Crude oil traded higher for the second day in New York as tension in the Middle Eastern region rises, disrupting the supply.

A light sweet crude oil for February delivery jumped by as much as $2.34, or 5.1 percent, to $48.68 a barrel in electronic trading on the New York Mercantile Exchange.

Recently, the contract was moving higher by $1.36 to $47.70 a barrel in Singapore's electronic trading.

On Friday, February crude-oil futures had surged by as much as $1.74 to end higher at $46.34 a barrel on the New York Mercantile Exchange in overnight trading on rising tension.

In energy sector, shares of Total SA, which is Europe's biggest oil refiner, gained by 1.6 percent after Israeli troops entered the Gaza Strip to take control of the region on the 10th day of the conflict, which started to destroy Hamas bases.

In the auto sector, the stock of Porsche led the downward momentum in the industry shares as it declined by 3.1 percent following a downgrade reported by Societe Generale, which pulled down its rating on to "hold" from "buy" on the dipping luxury car sales.

"Emerging markets have been Porsche's growth engine but they are now also under severe pressure," the French broker said, according to MarketWatch. The firm added that there's an increasing risk Porsche may overpay for Volkswagen to achieve full control.

Shares of Renault dropped by as much as 6 percent after Citi lowered its rating on the French automaker to "sell" from "hold" on concerns that car sales decline may continue and the firm's dividend is at risk.

Volkswagen stock tumbled by 2.0 percent. The automaker has been trying to raise its market share in the U.S., the reports said Monday.