Banks Rally In Europe

Ivaylo
08 Sep, 2006
Frankfurt

Buyers returned on European markets after losses of more than 2% over the last three sessions. Cost-cutting hopes gave a boost to leading telecommunications providers including Deutsche Telekom. All major markets were on a bit firmer footing on Friday, with virtually every sector trading in positive territory. The U.K. FTSE 100 index gained 0.4%, the German DAX 30 index rose 0.2% and the French CAC 40 index added 0.3%.

[R]AM 6:15AM European markets advance on banks and telecoms.[/R]
European markets were higher by mid-morning on Friday. The U.K. FTSE 100 index gained 0.4% at 5,878, the German DAX 30 index rose 0.2% at 5,785 and the French CAC 40 index added 0.3% at 5,074. Telecoms equipment maker Alcatel and its US rival Lucent Technologies are very close to merging after shareholders at both companies approved the French group’s $10.9bn all-share offer.

Deutsche Telekom advanced 1% after a report from the Financial Times Deutschland that the company is about to make further job cuts, in a bid to save 5 billion euros by 2010. Telecom Italia gained 1.4% in Milan and Vodafone Group added 1.1% in London.

Bank shares advanced in Europe. Capitalia, the Italian bank, advanced 0.9% after raising its 2007 earnings per share target, having said it would beat its 2006 forecast based on annualised data. Banca Monte dei Paschi di Siena reported a 28.9% rise in first half net profit. The shares gained 0.7%. German retailer Metro fell 3.1% after J.P. Morgan sold 17.5 million shares on behalf of the controlling Schmidt-Ruthenbeck family to other investors.

Oil extended a week of losses to strike a new five-month low under $67 on Friday after U.S. distillate supplies rose sharply and BP said it might be able to restore its Alaskan oilfield sooner than expected. Oil extended a week of losses to strike a new five-month low under $67 on Friday after U.S. distillate supplies rose sharply and BP said it might be able to restore its Alaskan oilfield sooner than expected. London Brent crude fell 49 cents to $66.04.

Gold opened Friday at a bid price of $617.10 a troy ounce, down from $635.50 on Thursday. The euro declined on Friday against the U.S. dollar on strong economic news from Washington and speculation that U.S. interest rates may rise higher. In morning European trading the euro bought $1.2714, down from $1.2728 late in New York the night before and nearly a cent weaker than the end of the day Wednesday. The British pound dropped to $1.8735 from $1.8748, while the dollar dropped slightly to purchase 116.40 Japanese yen from 116.18 the day before.

[R]5:00AM The precious metals declined due to profit-taking.[/R]
The most-active December gold closed down $16.90 at $624.90 a troy ounce on the NYME. The December silver contract slipped to a low of $12.51 an ounce. October platinum finished down $18.10 at $1,256.90 an ounce and December palladium ended $4.05 lower at $355.50 an ounce. The top-traded December copper contract sank 3.15 cents to close at $3.6480 per pound.

October crude oil lost 18 cents to end at $67.32 a barrel, the lowest close for the most active contract since April 7. October heating oil dipped 2.34 cents at $1.8876 a gallon. October unleaded gasoline rose 0.17 cent to $1.6417 a gallona and October natural gas plunged 27.6 cents at $5.718 a million British thermal units. On the New York Board of Trade, September Arabica coffee futures finished down 2.75 cents at $1.0350 a pound and December lost 2.75 cents to $1.076 per pound. Futures on raw sugar in foreign ports for October decreased 0.02 cent at 11.62 cents a pound.