Iraq offer on inspectors helps nervous markets

 

European blue-chip stocks are expected to climb higher today as fears of an imminent Gulf war receded, although Iraq's offer to readmit UN arms inspectors also sent crude oil prices falling.

But traders said the upside was limited after recent data showed economic activity on both sides of the Atlantic slowing, dampening the outlook for corporate profits.

Financial analysts in London expect Britain's FTSE 100 to open up 110-115 points, with Germany's DAX index adding between 67-125 points and France's CAC-40 jumping 125 points.

In Asia overnight, crude oil prices dropped $1.30, or 4.28 per cent, to $28.37 a barrel. That was some $2 below the 19-month high reached last month on fears of a military strike against Iraq, which has the world's second-largest oil reserves.

In New York last night, ahead of the Iraq news, the Dow Jones industrial average closed up 0.81 per cent and the Nasdaq ended 1.2 per cent lower.

The Dow had been in the red when most European markets closed, while US stock index futures indicated gains of between 2 and 3 per cent once Wall Street opens later in the session.