Europe Falls On Auto Weakness

Ivaylo
04 Jul, 2006
New York City

European shares slipped lower in light trading on Tuesday, with the automobile sector in decline on worries over the state of both the U.S. and European market and the weaker dollar. The U.K. FTSE 100 index declined 0.2%, the German DAX Xetra 30 index dipped 0.1% and the French CAC-40 index lost 0.1%.

[R]6:30 AM European stocks shifted into reverse on auto stocks weakness.[/R]
European markets were lower by mid-morning trade. The U.K. FTSE 100 index declined 0.2% at 5,873, the German DAX Xetra 30 index dipped 0.1% at 5,708 and the French CAC-40 index lost 0.1% at 4,975. Renault slipped 1.9% in recent talk that its alliance with Nissan will extend to General Motors. DaimlerChrysler lost 1% after a 13% slump in U.S. sales in June was more than analysts had projected. Fiat shed 0.5% as Merrill Lynch downgraded the stock to sell, citing valuation despite recent sales momentum. Some advancers included telecom company Vodafone Group advancing 1.1% after Deutsche Bank upgraded the mobile phone company to buy from hold, citing valuation. German steelmaker ThyssenKrupp also gained 1.9% after it said its board has approved the buying back up to 5% of its shares.

Crude oil traded near an eight-week high in London after Iran rejected U.S. and European demands to suspend nuclear research and U.S. gasoline prices advanced on holiday demand. Brent crude oil for August settlement gained 31 cents, or 0.4 percent, to $73.70 a barrel on the ICE Futures exchange in London. The contract traded at $73:45 at 9:37 a.m. London time. Gold bullion opened Tuesday at a bid price of $622.50 a troy ounce, down from $624.20 late Monday. The euro rose against the dollar Tuesday after weaker than expected U.S. manufacturing activity and sentiment that the European Central Bank is positioning itself for an interest rate increase gains. The euro bought $1.2815 in morning European trading, up from $1.2798 in New York late Monday. The British pound gained slightly to $1.8440 from $1.8416. The dollar slipped against the Japanese currency to buy 114.43 yen, up from 114.68 late Monday.

[R]5:15 AM Gold continues to advances on central banks plans.[/R]
Trading on the NYME was closed due to the July Fourth holiday. Gold in London traded at $624.20 per troy ounce, up from $613.50 late Friday. In Zurich, gold reached $624.25, up from $615.25. Gold advanced $19.90 in Hong Kong to close at $620.0. Silver traded in London at $11.28 per troy ounce, up from $11.04 and platinum touched a four-week high at $1,242 a troy ounce. The upward move in precious metals did not extent to base metals, though. The three-month copper contract declined $80 to $7,240 a tonne on the London Metal Exchange. Aluminium was $30 lower at $2,600 a tonne.

Oil prices advanced Monday on anticipation that large numbers of Americans will take to the road for Independence Day. Strong U.S. economic data and worries over Iran''s nuclear defiance also boost prices. Brent futures added 19 cents to $73.70 a barrel on the ICE Futures exchange, their eighth consecutive gain. Nymex was closed for the U.S. holiday, and traders suggested that lack of Nymex trading kept prices from going even higher.