Europe Widens Early Losses

Ivaylo
21 Jun, 2006
Frankfurt

European shares edged down on Wednesday, with gains held in check by interest-rate tightening concerns on both sides of the Atlantic. In Europe, ECB President Jean-Claude Trichet testified before the European parliament that risks to price stability prevail and that oil price pass-though will lift consumer prices in 2007. The European economy is, however, evolving in line with the central bank''s assessment, he added.

[R]6:15AM European stocks decline in mid-morning trade.[/R]
European markets traded lower in mid-morning. The U.K. FTSE 100 index lost 0.3% at 5,642, the German DAX Xetra 30 index shed 0.5% at 5,467, while the French CAC-40 index lost 0.5% at 4,747. Early attention focused on Ahold, the Dutch retailor, reporting better than expected quarterly results. However, there was no details about the strategic future of the company or possible restructuring. Ahold’s stock lost 0.5%. Philips added 2.2% in Amsterdam following reports that is preparing to list its chips division during the second half of the year. Stocks in steelmakers Arcelor and Mittal Steel both advanced on Wednesday after Severstal announced late Tuesday that it was willing to cut his proposed stake buy of Arcelor to 25% from 32%, and won't take his stake above 33% without a full tender offer. Swedish clothing chain Hennes & Mauritz advanced 3.5%, following reports that its second-quarter pretax profit advanced 8.2%.

Light sweet crude oil for August delivery dropped 18 cents to $69.16 a barrel In London, August Brent crude futures on the ICE Futures exchange shed 17 cents to $67.91 a barrel. The euro strengthened Wednesday against the U.S. dollar. European 12-nation currency purchase $1.2615 on Wednesday, up from $1.2584 in New York overnight. The British pound also advanced on the dollar, up to $1.8454 from $1.8425 on Tuesday. The dollar fell against the yen, down to 114.73 from 114.85 in New York late Tuesday.

[R]5:00AM Gold and silver rise on buying interest and fading dollar.[/R]
August gold ended up $8.10 at $580.50 a troy ounce. July silver advanced 30 cents to $10.27 an ounce. July platinum added $30.70 to $1,168.50 an ounce, while September palladium gained $8.90 to $304 an ounce. The benchmark July copper contract closed 1.90 cents higher at $3.1715 per pound.

The July crude oil contract shed 4 cents to $68.94 a barrel. The more active August contract lost 21 cents to close at $69.34 a barrel. July gasoline advanced 1.11 cents to $2.0025 a gallon. July heating oil gained 1.26 cents to $1.9074 a gallon. On the New York Board of Trade, July Arabica coffee closed 50 cents higher at 95.45 cents a pound and September gained 20 cents to 97.45 cents. Futures on raw sugar in foreign ports surged to two-week highs as funds purchased October. Trade houses bought July and the July-October spread before next week''s expiry. July finished up 36 cents at 15.21 cents a pound while October rose 39 cents to 15.58 cents a pound.