European stocks end up as oil slides

European share indexes closed on a positive note yesterday, boosted by leisure, travel and chemical stocks, as crude oil dropped below $67 dollar a barrel, although a fall in mining stocks helped cap gains.

French hotel and leisure group Accor jumped on the back of a wave of broker upgrades, while British retailer Next bounced on talk of a possible private equity bid.

The FTSEurofirst 300 index of leading European shares closed up 0.4 per cent at 1,356.7 points, down around 1.5 per cent for the week as uncertainty over the US Federal Reserve's interest rate policy and global growth worries gnawed.

"We've got a slightly positive bias but we're advising clients to stay put at this time," said Philippe Gijsels, senior equity strategist at Fortis Bank.

"We're advising people to stand aside and let this corrective process unfold."

On a light diary day for corporate and economic news, a fall in the oil price to around $66.80 a barrel, near its five-month low, buoyed the market.

Despite the slide in crude, BP gained 1.2 per cent after saying it could restart its giant oil field in Alaska by the end of October after rusty pipelines forced part of the field shut last month.

The prospect of lower fuel costs boosted shares in chemical companies, with Lanxess up 1.8 per cent, while Ciba added 1.6 per cent and Clariant gained 1.3 per cent.

Airlines and travel stocks also rose, with Air France-KLM up 1 percent and Iberia gaining one per cent. National Express added 1.5 per cent and Stagecoach rose 2.4 per cent.

Also in the DJ Stoxx European Travel and Leisure sector index, Accor shares rallied 4.4 per cent as brokers upgraded the company after it released better results than expected and asset-sale plans.

Mining stocks weighed on the downside, with Antofagsta down 2.1 per cent and Rio Tinto down 1.1 per cent as further profit taking hit copper futures in New York.

Also on the downside, German retail giant Metro fell 3.8 per cent after its biggest shareholders said they were selling a 5.4 per cent stake in the company.

Germany's Altana fell 3.2 per cent on speculation it might prove difficult for the firm to sell its pharmaceutical unit at a good price.

"It looks like Altana will face difficulties to fetch what they had originally in mind," said a trader.