Aug. 4 (Bloomberg) -- European stocks declined, paced by oil producers including Total SA. The French company, whose shares reached a record yesterday, said second-quarter oil and gas production decreased and refinery output dropped.

Royal Bank of Scotland Group Plc and Anglo American Plc fell after reporting earnings that missed analysts' estimates.

The Dow Jones Stoxx 600 Index, which reached its highest since May 2002 two days ago, lost 0.3 percent to 286.18 at 10:15 a.m. in London. The Stoxx 50 fell 0.5 percent, and the Euro Stoxx 50, a benchmark for the 12 countries using the euro, retreated 0.3 percent.

``In general, earnings are not bad, but we must remember that a large part of the market is at the highest in three years,'' said Alfonso Trevino, who helps manage about $185 million at Atlas Capital in Madrid. ``I expect August to be a flat month.'' He said he recently cut his equity holdings, and will wait until September before considering buying stocks.

Unilever, the maker of Dove soap and Lipton iced tea, limited declines as it reported unexpectedly increased sales.

The Stoxx 50 has increased 13 percent this year amid speculation that earnings will increase. About 61 percent of the Stoxx 50 companies that have given figures for the quarter have beat analysts' estimates in Bloomberg surveys.

Indexes Drop

Indexes fell in all 16 Western European markets that were open, except for Sweden and Finland. Germany's DAX Index lost 0.1 percent, as did the U.K.'s FTSE 100 Index. France's CAC 40 Index slipped 0.5 percent.

Total, Europe's largest oil refiner, dropped 1.7 percent to 207.80 euros in Paris. BP Plc, Europe's biggest oil company, fell 0.7 percent to 638.5 pence after closing at its highest in almost five years yesterday.

Oil prices yesterday reached a record $62.50 a barrel before erasing gains after European stock markets closed. Crude-oil futures in New York were recently trading at $60.98.

Total today also reported that second-quarter profit climbed 33 percent, bolstered by higher crude prices and wider refining margins. The result met analysts' estimates.

Strikes and maintenance shutdowns hurt the French company's refinery output, curbing the company's ability to take advantage of surging profit margins.

Royal Bank, Anglo Miss

Royal Bank of Scotland, the U.K.'s second-largest lender by assets, lost 2.4 percent to 1662 pence. First-half profit gained 10 percent to 2.53 billion pounds ($4.5 billion), short of the 2.65 billion-pound median estimate of eight analysts surveyed by Bloomberg.

Anglo American dropped 0.6 percent to 1,454 pence. The world's second-biggest miner said first-half profit fell 17 percent after it didn't repeat gains from asset sales that buoyed earnings last year.

Anglo's first-half profit before one-time items and goodwill costs climbed to a record $1.78 billion, or $1.24 a share, from $1.25 billion, or 87 cents, a year earlier. The median estimate of four analysts surveyed by Bloomberg was for earnings per share of $1.25 on that basis.

Epcos AG, a German maker of electronic components, lost 8 percent to 11.10 euros after reporting a fiscal third-quarter loss on lower demand and tax payments.

Unilever Jumps

Unilever jumped 2.7 percent to 56.50 euros in Amsterdam. The company said its second-quarter sales rose 1 percent. That was better than the median estimate of 12 analysts surveyed by Bloomberg News that sales would be unchanged.

``The top-line growth figure is a real confidence-booster in our opinion,'' said Delta Lloyd Securities analyst Richard Withagen. He has a ``buy'' rating on the shares.

The company also said second-quarter profit dropped 28 percent as it spent more to develop new products and wrote down the value of its SlimFast products.

Imperial Chemical Industries Plc rose 4.4 percent to 282 pence. The U.K.'s largest specialty chemical maker posted second- quarter profit that beat analyst estimates.

Clariant AG, the world's second-largest specialty chemical maker, advanced 2.5 percent to 18.75 Swiss francs. Second-quarter net income rose 28 percent to 74 million francs ($58.6 million) as the company cut costs. The company was expected to earn 40 million francs, the median estimate of nine analysts surveyed by Bloomberg News.

Linde AG, Germany's largest maker of industrial gases, rose 2.4 percent to 60.73 euros after saying profit more than doubled in the second quarter, boosted by demand for gas and cost cuts. Linde is sticking to its target for higher earnings this year.

Amvescap, GKN

Amvescap Plc slumped 7.9 percent to 383 pence, the biggest loser on the Stoxx 600. Canada's CI Fund Management Inc. yesterday said after markets closed that it wouldn't pursue a hostile takeover of the owner of the Aim funds.

GKN Plc, which makes panels for Airbus SAS planes and engine parts for Ford Motor Co., paced gaining stocks in the Stoxx 600, climbing 6 percent to 288.75 pence. First-half sales increased 4.6 percent from a year earlier. Profit excluding some items rose 24 percent in the period.

Sandvik, the world's biggest maker of metal-cutting tools, added 3.7 percent to 333.5 kronor in Stockholm. Second-quarter earnings rose to 6.10 kronor a share, exceeding the 5.79 kronor that analysts on average in a SME Direkt survey of 10 analysts had estimated.

The Bank of England may reduce its benchmark interest rate for the first time in more than two years today after the U.K. economy grew at the slowest annual pace since 1993 in the second quarter, a survey of economists showed.

The European Central Bank will probably set its benchmark interest rate at 2 percent for a 26th month today as increasing signs of an economic recovery alleviate the need for lower borrowing costs, a survey of economists showed.

To contact the reporter on this story: Margo Towie in Brussels at mtowie@bloomberg.net.

Last Updated: August 4, 2005 04:17 EDT