Mining, oil stocks among worst hit; airlines, travel companies rally By Simon Kennedy , MarketWatch LONDON (MarketWatch) — European stocks dropped Tuesday after Japan raised the severity level of its nuclear crisis, with commodity-related stocks coming under the heaviest pressure as oil and metal prices fell. The Stoxx Europe 600 index (ST:STOXX600 279.38, -1.61, -0.57%) fell 0.6% to 279.34 in early trading following a 1.7% drop for Japan’s Nikkei Stock Average. Other Asian markets were also weaker after Japan’s nuclear-safety authorities raised their assessment of the severity of the Fukushima Daiichi nuclear crisis to the same level as the 1986 Chernobyl disaster. Regulators assessed the crisis as level 7 — the highest possible on an international scale — but said the amount of radiation released is around 10% that of Chernobyl. Read more on Japan's assessment of its nuclear crisis. The weak performance in Europe also came after a disappointing start to U.S. earnings season, as Alcoa Inc. (AA 17.77, -0.15, -0.84%) late Monday reported sales that missed expectations. Oil and mining stocks were hit hard in Europe as commodity prices fell. Shares in Total SA (FR:FP 42.36, -0.65, -1.51%) were down 1.6% in Paris and Kazakhmys PLC (UK:KAZ 1,444, -49.00, -3.28%) dropped 3.6% in London. Mining stocks were the biggest fallers in the U.K. and helped pull the FTSE 100 index (UK:UKX 6,021, -32.74, -0.54%) down 0.6% to 6,017.17. Crude oil for May delivery fell 71 cents to $109.21 a barrel in electronic trading on Globex, having earlier dipped below $108 a barrel after the International Monetary Fund downgraded its growth estimates for the U.S. and Japan. Read more on the retreat for crude oil prices. The pullback in oil prices helped lift travel and airline stocks. Shares in Air France-KLM (FR:AF 11.59, +0.26, +2.30%) rose 2.9% in Paris and Ryanair Holdings PLC (IE:RY4B 3.42, +0.06, +1.91%) climbed 1.6% in Dublin. Also on the Irish market, shares in Allied Irish Banks PLC (IE:AIB 0.24, -0.01, -4.00%) (AIB 3.50, -0.40, -10.26%) slumped 11.2% after the group said its 2010 loss widened to 10.23 billion euros ($14.76 billion) and that it will cut around 2,000 jobs in 2011 and 2012. The Irish ISEQ Overall index (XX:IEOP 2,924, -6.40, -0.22%) fell 0.4% to 2,918.75. Other peripheral markets were also lower, with Portugal’s PSI 20 index (XX:PSI20 7,894, -22.62, -0.29%) falling 0.4% to 7,884.23. Shares in German reinsurance group Munich Re (DE:MUV2 116.46, +0.05, +0.04%) rose 1.1% after the firm was upgraded to overweight from equal-weight at Morgan Stanley. However, losses for automotive and technology stocks weighed on the country’s main index. The DAX 30 (DX:DAX 7,171, -33.55, -0.47%) fell 0.6% to 7,161.12, led by a 2.2% decline for Volkswagen AG (DE:VOW3 108.50, -2.00, -1.81%) and a 2.9% drop for chip maker Infineon Technologies AG (DE:IFX 7.13, -0.24, -3.28%) . French auto stocks were also lower, with Renault SA (FR:RNO 38.09, -0.88, -2.26%) falling 2.6%. The CAC 40 index (FR:PX1 4,018, -20.56, -0.51%) fell 0.6% to 4,015.91. Among other stocks in focus across Europe, shares in Delta Lloyd NV (NL:DL 17.47, -1.52, -7.98%) dropped 7.8% in Amsterdam after U.K. insurer Aviva PLC (UK:AV. 445.60, -7.50, -1.66%) said it will sell some of its stake in the group. Italy’s Banca Monte dei Paschi di Siena SpA (IT:BMPS 0.97, +0.03, +2.97%) rose 3% after the bank outlined a new growth plan and said it’s targeting a profit of over €1.7 billion in 2015.

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