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While you were sleeping: Stocks and oil slip

Tuesday 6th July 2010

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Stocks in Europe, Brazil and Canada fell, as did oil prices, amid increasing signs that economic growth was cooling globally.

US markets, which were closed for the Independence Day holiday, will reopen tomorrow. The Stoxx Europe 600 Index fell 0.3% to 236.68, its lowest level since May 25. Brazil's Bovespa Index declined 0.4%, and Canada's S&P/TSX Composite Index dropped 1.2%.

A Chinese services industry index slid to a 15-month low in June, adding to signs that growth the world's third-biggest economy was slowing.

In the UK, confidence among chief financial officers at major companies fell for a second quarter to a 12-month low on concern the economy would return to recession amid the government's budget squeeze, a survey by Deloitte LLP found.

Across Europe, the UK's FTSE 100 fell 0.30%, Germany's DAX lost 0.31% and France's CAC 40 dropped 0.48%.

Among the most active stocks in Europe were BHP Billiton, Rio Tinto Group, Bilfinger Berger AG and BP Plc.

BP advanced 3.5% after the Sunday Times reported, without saying where it got the information, that the oil company was seeking a strategic investor that would help it thwart takeover bids. The Guardian newspaper reported that the Kuwait Investment Office was in talks about increasing its stake in BP to as much as 10%.

The British oil company might sell oilfields in Colombia, Venezuela and Vietnam to generate cash to pay for the costs of the spill in the Gulf of Mexico, according to a Bloomberg News report.

Seven out of 10 hedge fund managers said they expect a "trying" year as the industry faces regulatory oversight and competition picks up with more funds likely chasing investment dollars, according to a survey by accounting and audit firm Rothstein Kass.

Rothstein Kass surveyed 381 hedge fund firms in the first half of 2010 and will release the findings of its fourth annual survey on Tuesday. Reuters obtained a draft of the report.

Bonds rose in Europe after European Central Bank President Jean-Claude Trichet urged "austerity" measures to contain budget deficits.

Trichet said on Sunday that he had "no problem with austerity, rigor" as "good budgetary management," following reports last week that showed US payrolls dropped for the first time this year and factory orders slumped.

The yield on 10-year German bunds fell four basis points to 2.55%.

The Dollar Index, which measures the greenback against a basket of six major currencies, edged 0.17% higher to 84.57.

The euro fell after hitting a six-week high on weak US jobs data late last week.

By 1408 GMT, the euro slipped 0.3% to US$1.2522, with support seen close to Friday's low around US$1.2480. The euro fell 0.4% versus the yen.

On Friday, the Reuters/Jefferies CRB Index, which tracks 19 raw materials, close at  254.48.

Oil fell, heading for a sixth straight session of losses, on persistent concern about slowing global economies and demand for fuel.

US crude for August was down 62 cents at US$71.52 a barrel by 12.25pm EDT.

ICE Brent crude for August declined 42 cents to US$71.23.

The New York Mercantile Exchange (NYMEX) will combine Monday's and Tuesday's trading sessions because of the US Independence Day holiday, with a single settlement price on July 6.

"Where oil moves next very much depends on equity market sentiment and the economic outlook and as long as economic pessimism persists oil should hold at the lower end of the US$70-$80 range," Carsten Fritsch, oil analyst at Frankfurt-based Commerzbank, told Reuters.

Oil prices fell every day last week for a cumulative decline of 8.5%, the steepest weekly drop since early May.

London copper futures rose, as did nickel.

LME copper rose US$120 to US$6,530. Last week copper prices dipped 6%, their biggest weekly drop in a month.

Brazilian mining giant Vale said it had struck a deal with unions at the company's nickel and copper operations in Sudbury and Port Colborne, Ontario.

A separate strike at Vale's Voisey's bay nickel mine in eastern Canada began last August. The Sudbury and Voisey's Bay operations together produce about 10% of the world's nickel.

Three-month nickel on the London Metal Exchange rose US$350 to US$19,150 by 0704 GMT.

Nickel, up 3.4% this year, is the strongest performer of the metals, most of which have seen double-digit percentage falls, according to Reuters data.

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