Europe Sinks On Profit Taking

Ivaylo
18 Aug, 2006
Frankfurt

Inflationary concerns were back as the latest manufacturing data from the Philadelphia Federal Reserve were unexpectedly strong. That influenced an already thin by volume August trade. The FTSE 100 in London was backed by defense stocks and tobacco shares but other markets slumped. The U.K. FTSE 100 index added 0.2%, while the German DAX Xetra 30 index lost 0.1% and the French CAC-40 index fell 0.1%.

[R]6:30AM European markets were mostly lower on profit taking.[/R]
European markets were lower by mid-morning on Friday. The U.K. FTSE 100 index added 0.2% at 5,911, while the German DAX Xetra 30 index lost 0.1% at 5,827 and the French CAC-40 index fell 0.1% at 5,140. BAE Systems advanced 3.5% after it stated that it hails the agreement between the governments of Saudi Arabia and the U.K. of the commercial principles that will initiate Saudi Arabia's purchase of Eurofighter Typhoon jets. Also, other major gainers included Imperial Tobacco up 1.3% and British American Tobacco rising 1.2%.

The Eurofighter is a joint project between Britain’s BAE Systems, Italy’s Finmeccanica, which rose 1.3% , and EADS, Europe’s largest aerospace group, which gained 0.6%. Other defense groups were higher also. Thales, the French defense electronics group, is also in negotiation to supply to the Middle East and gained 1.4%

Oil prices advanced Friday after hitting the bottom at $70 a barrel a day earlier on a wave of good news in the Middle East and an Alaskan oil field. Late Friday morning in Europe, light, sweet crude oil for September delivery rose 68 cents to $70.74 a barrel in electronic trading on the NYME. At London's ICE Futures exchange, Brent crude for October was up 53 cents to $72.11 a barrel.

The U.S. dollar traded mixed against other major currencies in European trading on Friday morning. Gold fell. Dealers in London fixed a recommended price of $614.75 at mid-morning, down from $624.80 Thursday. The euro traded at $1.2819, down from $1.2827 Thursday. The British pound bought $1.8840, down from $1.8841. The dollar purchased 115.60 Japanese yen, down from 115.90.

[R]6:00AM Gold Retreats to a seven-week low, silver and copper follow suit.[/R]
Gold for December delivery settled down $13.70 at $625.30 an ounce on the NYME. September silver futures finished down 29 cents at $11.99 an ounce. October platinum lost $17.70 to $1,233.30 an ounce and the September contract for palladium was down 55 cents at $335.85 an ounce. September copper fell 11.30 cents to $3.3575 a pound.

September crude oil ended down $1.83 a barrel to at $70.06, while September gasoline closed 4.65 cents lower at $1.9316 a gallon after hitting a low of $1.9150 a gallon. September heating oil moved back 5.19 cents lower at $1.9650 a gallon. September natural gas settled down 7.7 cents at $6.689 a million British thermal units. On the New York Board of Trade, the most-traded December Arabica coffee lost 1.10 cents to $1.0750 per pound. Futures on raw sugar in foreign ports for October shed 0.45 cent to 12.20 cents a pound.