Investors blow cool on energy investments

Renewable energy stocks led a broad retreat among European equities yesterday as investors unwound positions that hedged against the rising price of oil. Weak eurozone growth figures also knocked consumers stocks down.

Norwegian solar industry bellwether Renewable Energy tumbled 8.2 per cent to NKr145.50, Germany's Q-Cells slipped 4.9 per cent to €63.84 and peer German Solarworld lost 5.6 per cent to €32.83. Danish windpower company Vestas Wind shed 4.5 per cent to DKr644.

Oil stocks lost some ground. Norway's StatoilHydro , which was added to Goldman's "conviction buy" list, dropped 0.5 per cent to NKr152.30, Austria's OMV lost 2.2 per cent to €41.26, France's Total fell 2.3 per cent to €46.27 and Portugal's Galp Energia shed 1.9 per cent to €12.63.

US-based Ospraie Management said yesterday it would close its biggest hedge fund after it slumped 39 per cent this year because of bad bets on commodity stocks. Metals stocks lost their lustre with Sweden's SSAB down 4.9 per cent to SKr125.25 and France's ArcelorMittal down 3.8 per cent to €48.

Eurozone growth figures compounded the gloom, sending the FTSE Eurofirst down 1.5 per cent to 1,181.90, while in Frankfurt the Xetra Dax was 0.8 per cent lower at 6,467.49 and in Paris the CAC 40 lost 2 per cent to 4,447.13.

Second-quarter GDP sank as household spending dropped, with rising oil prices and tightening bank credit hitting consumer's pockets.

Worries about growth knocked consumer stocks, with Spanish retailer Inditex , which owns the Zara chain down 3.3 per cent to €32.05 and Sweden's Hennes & Mauritz 1.8 per cent lower to SKr320. France's Carrefour , the world's secondlargest retailer, fell 1.9 per cent to €36.38.

Finnish mobile handset maker Nokia sank 4.6 per cent to €16.20 after US rival Qualcomm's chief executive said customers were becoming slower to upgrade their mobile phones. Alcatel- Lucent fell 4.4 per cent to €3.97 giving up recent gains.

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