Europe Falls On Rate Concerns

Ivaylo
28 Jun, 2006
Frankfurt

The US the main stock indicators plunged overnight as investors became concerned that the Fed may continue hiking interest rates to curb inflation. The auto sector had a strong negative influence on the markets as some automaker took losses. London

[R]6:30 AM European stocks in early trading due to rate fears.[/R]
European markets traded lower in early trading on Wednesday. London’s FTSE 100 bucked the downtrend, adding 0.2% to 5,661.6, while Frankfurt’s Xetra Dax lost 0.2% to 5,445.39, and the CAC 40 in Paris shed 0.2% to 4,760.25. On the corporate front, Renault, the French carmaker, shed 1.1%. Nissan, the Japanese manufacturer which is 44% owned by Renault, on Tuesday said it may miss its domestic full-year sales target. Meanwhile, Dieter Zetsche, chairman of DaimlerChrysler said the company’s US Chrysler division was spending too much on incentives to clear unacceptable levels of vehicle inventory. DaimlerChrysler fell 0.9%. Shares in Adidas, the sportwear manufacturer, shed 0.8% after US rival Nike reported a 5% drop in fiscal fourth-quarter net profit. The US company announced that current-quarter profits would be hit by World Cup marketing spending. European rival Puma shed 1.5%.

Light, sweet crude oil for August delivery advanced 17 cents to $72.09 a barrel. In London, Brent crude futures on the ICE Futures exchange gained 44 cents to settle at $71.42 a barrel. Gold in London traded at $584.00 per troy ounce, down from $593.60 late Tuesday. The U.S. dollar advanced against other major currencies in European trading Wednesday. The euro traded at $1.2563, down from $1.2580 late Tuesday in New York. The dollar was up against the yen, buying 116.29 Japanese yen, up from 116.28. The British pound traded at $1.8186, down from $1.8230.

[R]5:00 AM Gold falls on selling pressure ahead of Fed meeting.[/R]
The benchmark August gold contract ended $3.30 lower at $584.40 a troy ounce. July silver futures hit a two-week high of $10.62 an ounce. But the contract faced selling to close at $10.195 an ounce, down 4.5 cents on the day. July platinum futures finished up $7 at $1,188.30 an ounce. Traders noted that most of the activity was seen in spread trading as the July contract rolls into October. September palladium settled down $6.35 at $314.20 an ounce. The most-traded September copper contract shed 14.70 cents to end at $3.0860 per pound.

Petroleum products futures maintained most of their gains. August crude-oil futures advanced 12 cents to $71.92 after rising as high as $72.50 a barrel. July gasoline settled up 2.12 cents at $2.20 a gallon. July heating oil rose 2.02 cents to $1.9587. On the New York Board of Trade, July Arabica coffee futures finished up 0.75 cent at 95.35 cents a pound, while September gained 0.75 cent to 96.70 cents. Futures on raw sugar in foreign ports for July finshed down 0.12 cent at 15.64 cents a pound while October shed 0.12 cent to 16.19 cents a pound.