Cautious Start for Europe

Ivaylo
03 Aug, 2006
Frankfurt

The prospects of such a move by the ECB are already estimated by the market, but investors were also saying that Jean-Claude Trichet, the central bank president, will supplement the decision with appeasing comments about the inflation outlook in the eurozone. By mid morning, London

[R]6:30AM Europe markets lower on expectation of ECB rate call.[/R]
European markets were lower Thursday morning. London’s FTSE 100 shed 0.6% to 5,898.2, while Frankfurt’s Xetra Dax slipped 0.8% to 5,638.20 and in Paris, the CAC 40 dropped 0.6% to 4,997.17. Earnings were again the focal point in Europe, and the oil sector suffered as French producer Total, reporting a 16% rise in second-quarter net profit, fell just shy of market expectations and its shares fell 1.5%.

Finnish refiner Neste Oil lost 6.2% unexpectedly reporting weak second-quarter operating profit.. Numico sank 2.8% as better-than-expected second-quarter earnings were overshadowed by sales that sank just shy of expectations and Danone, posting record first-half sales on Wednesday, shed 0.9% while Swiss group Nestle shed 1.9%.

Financial stocks gained as Société Générale, said net profit in the second quarter climbed nearly 38%, topping forecasts on strong growth in its investment banking operations. The shares climbed 0.2% and the UK’s Barclays too said that booming investment banking growth led to a better-than-forecast 37% rise in first-half profits lifting its shares 1.1%.

Oil prices rose slightly Thursday morning after a jump the day before on news that U.S. crude and gasoline inventories had fallen, and a tropical storm was gaining strength in the Caribbean. Light sweet crude for September delivery was up 4 cents to $75.85. London ICE Brent crude was trading 22 cents lower at $76.67 by 0915 GMT on Thursday.

Gold traded at $646.50 an ounce, down $2.20 an ounce from Wednesday. The euro lost ground against the U.S. dollar ahead of Thursday''s European Central Bank interest rate decision. The euro bought $1.2760 in early European trading, down from $1.2798 in New York late Wednesday. The British pound dropped to $1.8746 from $1.8779. The dollar also climbed to 114.76 Japanese yen from 114.55 yen.

[R]5:00AM Gold, silver continue to rise due to the Middle East and the weak dollar[/R]
The most-traded December gold ended $5.30 higher at $664.10 a troy ounce, down slightly from the day''s high at $668.20. September silver finished up 50.5 cents at $12.245 an ounce. October platinum closed up $2.10 at $1,260.60 an ounce and September palladium finished up $7 at $328.95 an ounce. September copper settled down 0.2 cent at $3.5910 per pound.

The September crude-oil contract ended up 90 cents at $75.81 after rising as high as $76.50 earlier. September gasoline finished up 6.15 cents at $2.3377 a gallon and September natural gas gained 22.5 cents to settle at $7.799 a million British thermal units. Arabica coffee futures rallied to one-month highs. September ended 5.40 cents higher at $1.0370 a pound and December gained 5.30 cents to $1.0775 a pound. October futures for raw sugar in foreign ports lost 0.37 cent at 14.53 cents a pound.