Subdued Europe

Ivaylo
23 Aug, 2006
Frankfurt

As interest rate worries resurfaced and oil prices held at around $73 a barrel, Europe was further held back by metals and defense stocks. A lack of surprises in the earnings report from metals company BHP Billiton and a spending plan at defense group EADS put mild pressure on U.K. and Paris bourses. By mid morning, London

[R]6:30AM European stocks traded slightly lower, holding to a tight range.[/R]
European markets traded lower by mid-morning on Wednesday. London’s FTSE 100 edged down 0.1% to 5,896.2, while Frankfurt’s Xetra Dax lost 0.2% to 5,810.12. The CAC 40 in Paris shed 0.1% to 5,124.91. Nestle advanced 1.9% following its statement that its first-half net income grew a better-than-forecast 11.4%. Unilever and Cadbury Schweppes were marginally higher.

Mining stocks, however, declined. BHP Billiton plunged 2.4% after gaining in recent weeks and after the company said over the longer term it expects the introduction of new capacity to return prices to more sustainable levels. Away from mining, European defense company EADS was another decliner, shedding 1.4% in the wake of a report stating that it''s planning to invest 2 billion euros ($2.58 billion) in India over the next 15 years.

Crude oil fell on expectations that gasoline demand will slow with the end of the travel season in the U.S., the world''s biggest energy consumer. Crude oil for October delivery declined as much as 59 cents, or 0.8%, to $72.51 a barrel in after-hours trading on the NYME. It traded at $72.54 at 10:59 a.m. in London, where, also, Brent crude oil for October settlement declined 52 cents to $72.70 a barrel on the ICE Futures Exchange.

The U.S. dollar was lower against other major currencies in European trading Wednesday morning. The euro purchased $1.2817, up from $1.2796 late Tuesday in New York. The British pound traded at $1.8920, up from $1.8866. The greenback bought 116.25 Japanese yen, down from 116.57. Gold dealers in London fixed a recommended price of $623.50 per troy ounce at midmorning, up from $622.30 late Tuesday.

[R]5:00AM Gold futures fell Tuesday on stronger dollar and technical trading.[/R]
December gold ended $1.20 lower at $634 a troy ounce, as the contract got as low as $629.60 during the session. The most-active September silver contract finished at $12.265 an ounce, down 8 cents on the day. October platinum was off $4.30 at $1,237.80 an ounce while September palladium lost $4.20 at $341 an ounce. The September copper contract shed 2.65 cents to settle at $3.4930 per pound. December moved back 1.15 cents to $3.4780.

The front-month September light, sweet crude-oil contract, which expires Tuesday, finished 18 cents higher at $72.63 a barrel. October futures, which will become the front-month contract, sank 20 cents to $73.10. September gasoline rose 0.27 cent to $1.9393 a gallon. September heating oil was up 0.39 cent to $2.0366 a gallon, while September natural gas ended up 38.4 cents at $7.008 a million British thermal units. On the New York Board of Trade, September Arabica coffee futures settled up 1.20 cents at $1.0820 a pound while December gained 1.65 cents to $1.1260. Futures on raw sugar in foreign ports for October moved 0.08 cent lower to 12.06 cents a pound.