European Energy Stocks May Rise

European energy stocks may rise after oil traded near a 10-month high. Total SA, Europe's largest refiner, and Royal Dutch Shell Plc may lead gains.

Thomas Cook Group Plc, the travel operator created last month by a merger, may decline after Credit Suisse Group rated the shares ``underperform'' in new coverage. Groupe Danone SA may be active after a report said it might be in talks to sell its biscuit and cereal products division to Kraft Foods Inc.

``Oil stocks may gain, but concerns about terrorism and a higher oil price weigh on market sentiment at the start of the week,'' said Klaus Stabel, head of research at ICF Kursmakler AG in Frankfurt. ``Fund managers polishing up their portfolios at the end of the quarter sent the markets higher Friday. This demand factor is gone now.''

U.S. stocks fell on June 29, erasing a 102-point rally in the Dow Jones Industrial Average, after a bomb scare swept London and concern grew that banks face more losses from subprime loans.

Futures on the Euro Stoxx 50, a benchmark for the countries using the euro, decreased 26 to 4489 at 7:06 a.m. in London. The U.K.'s FTSE 100 Index may drop 45 to 6563, according to CMC Markets, a betting firm.

Total and Shell, the region's largest oil company, may advance after oil stocks led Asian stocks higher today. Crude oil traded near a 10-month high in New York after rising last week on declining U.S. fuel stockpiles and concern that car bombings in the U.K. will raise tensions.

Crude oil for August delivery was at $70.41 a barrel, down 27 cents, in after-hours electronic trading on the New York Mercantile Exchange at 10:55 a.m. in Singapore. The contract rose $1.11, or 1.6 percent, to $70.68 on June 29, the highest close since Aug. 25.

Thomas Cook, Danone

Thomas Cook may drop. Credit Suisse set its price estimate for the stock at 255 pence, 21 percent below the last close.

``We take a negative view on the package-holiday market, which is at the core of Thomas Cook's operations,'' London-based analysts including Philippe Ronceau wrote in a report published today. ``In a declining volume market, and with the prospect of pricing pressure coming from low-cost airlines, we believe the charter-based operators will not be able to increase selling prices beyond inflation.''

Danone, the world's biggest yogurt maker, may be active. Kraft is believed to be in discussions with Danone over the purchase of the French company's biscuit and cereal products division, the Financial Times reported, without saying where it got the information. The price being discussed is not known, the newspaper said. Kraft and Danone refused to comment, the FT said.

Debenhams, Deutsche Telekom

Debenhams Plc may be active. The U.K. department store company has discussed mergers with at least three rival European retailers, the Sunday Times reported, without saying where it got the information. The group has held discussions with Germany's KarstadtQuelle AG, Paris-based Galeries Lafayette SA and Italy's Rinascente SpA, the newspaper said.

``Nothing substantial came out of the talks'' between the U.K. department store company and KarstadtQuelle Chief Executive Officer Thomas Middelhoff, said Joerg Howe, director of communications at KarstadtQuelle on July 1. A call to Debenhams's press office by Bloomberg News wasn't returned. Andy Cornelius, a spokesman for Debenhams in London, wasn't immediately available for comment.

Deutsche Telekom AG may be active. The region's biggest phone company may still be on target for a 2007 profit of 19 billion euros ($26 billion) after a six-week strike ended, Chief Executive Officer Rene Obermann was cited as saying in a Focus magazine interview.

Groupe Eurotunnel SA, which operates the rail link between the U.K. and France, will start trading today. Chief Executive Officer Jacques Gounon said the company paid off its 9.2 billion- euro debt on June 29, putting debt in line with revenue for the first time.

Tognum AG, the former diesel engine maker of DaimlerChrysler AG, also trades for the first time today. Tognum sold 75 million shares at 24 euros each.

source:bloomberg.com