Europe Shakes Off Early Weakness

Ivaylo
01 Aug, 2006
Frankfurt

European stocks turned higher on Tuesday, as broadly satisfying results from the likes of Allied Irish Banks and KPN offset weakness caused earlier by Deutsche Bank and Ryanair. The U.K. FTSE 100 index notched 0.2% up and the French CAC-40 index gained 0.1%, with only the German DAX Xetra 30 index slipping 0.1%.

[R]6:30AM European stock markets overcome early weakness to turn higher.[/R]
European markets traded higher by mid morning. The U.K. FTSE 100 index advanced 0.2% at 5,941 and the French CAC-40 index added 0.1% at 5,016, with only the German DAX Xetra 30 index dipping 0.1% at 5,676. In early trading Deutsche Bank reported a 30% increase in second-quarter net profit on stronger commission income. The bank, however, stated that income from trading financial assets was weaker-than-expected in the wake of recent market volatility and the shares shed 2%. Ryanair was also off 2.3% after its staement that it maintains a cautious outlook for the rest of the year.

Positive results from KPN and Man AG counterbalanced the news from Deutsche Bank and Ryanair. Dutch telecommunications operator KPN rose 5 per cent to ˆ9.33 after reporting a stronger-than-expected 10 per cent rise in core earnings and an improving outlook. German truckmaker and printing machine manufacturer Man AG gained 2.6% after it revealed that its second-quarter net profit more than doubled to 198 million euros ($252 million), from 97 million euros a year earlier.

Crude oil bounced back after the U.S. National Hurricane Center said Tropical Storm Chris, the third named storm of the Atlantic hurricane season, had formed in the Caribbean southeast of Puerto Rico and was likely to strengthen. Crude oil for September delivery was up 14 cents to $74.54 a barrel on the New York Mercantile Exchange at 11:02 a.m. in London. Brent crude oil for September settlement gained 22 cents to $75.36 a barrel on the ICE Futures exchange in London.

Gold in London traded at US$632.00 per troy ounce, down from US$632.58 on Monday. The U.S. dollar was mixed against other major currencies in early European trading Tuesday. The euro was quoted at $1.2739, down from $1.2768 late Monday in New York. The British pound was traded at $1.8651, down from $1.8678 and the dollar bought 114.77 Japanese yen, up from 114.56.

[R]5:00AM Gold prices slid, natural gas jumped, other metals moved up a bit.[/R]
December gold futures settled $1 lower on Monday at $646.80 an ounce on the NYME. September silver contract ended 0.5 cents higher at $11.370 an ounce. October platinum added up $7.90 at $1,241.60 an ounce while September palladium finished $3.00 higher at $317.15 an ounce. Copper closed higher after gaining strong buying support as workers at Chile''s Escondida copper mine are set for a possible strike in the coming weeks. September copper ended up 2.1 cents at $3.57 per pound.

The front-month September light, sweet crude oil contract finished up $1.16 to $74.40 a barrel. The heat in North America sent natural gas prices up. September natural gas rose $1.027 to end at $8.211 a million British thermal units. August gasoline, which expires Monday, finished down 0.46 cents to $2.2289 a gallon. On the New York Board of Trade, September Arabica coffee futures closed 0.05 cent lower at 99.35 cents while October futures for raw sugar in foreign ports added up 0.15 cent at 14.91 cents a pound.