Europe Higher on Merger Activity

Ivaylo
21 Sep, 2006
New York City

The fact that German pharma company Merck has agreed to obtain a majority stake in Serono and the bid speculation in the Spanish property sector boosted Eurpean markets on Thursday. After a difficult morning, the FTSE climbed out of early losses as gains in the mining sector offset a slide in oil stocks. The FTSE 100 was up 0.31% at 5,873.6, while the German Xetra Dax added 0.2% and the French CAC 40 gained 0.2%.

[R]6:30AM European shares advance on merger deals.[/R]
European marketswere higher by mid-morning on Thursday. The FTSE 100 was up 18.10 points, or 0.31% at 5,873.6, while the German Xetra Dax added 10.2 points, or 0.2 per cent, to 5,964.63 and the French CAC 40 gained 10.4 points, or 0.2 per cent, to 5,203.18. Merck has agreed to obtain a majority stake in Serono, creating a new European pharmaceutical giant. Merck fell 6% while Serono shares were suspended at a fixed price.

Metrovacesa rose 7% to a record high as hopes of a bidding war for control of the Spanish largest property group squeezed the share price higher. Cresa, the Spanish property company controlled by the Sanahuja family, has gained acceptances representing 145 of Metrovacesa’s shares after it launched a ˆ78.1 per share bid for a 20% stake. In other news, EADS fell 1.85 after the aerospace company confirmed there will be new delays to deliveries of its A380 superjumbo.

Oil prices edged higher on Thursday after hitting six-month lows the previous session. U.S. light crude was trading 20 cents higher at $60.67 a barrel, while London Brent crude was up 26 cents at $61 by 0943 GMT. Gold opened Thursday at a bid price of $584.90 a troy ounce, up from $578.60 late Wednesday.

The euro rose against the U.S.dollar on Thursday after the U.S. Federal Reserve kept interest rates unchanged a day earlier. In morning trading, the euro rose to $1.2725, up from $1.2691 late Wednesday in New York. The British pound rose to $1.8942 from $1.8881 late Wednesday after the minutes of the Bank of England last Monetary Policy Committee meeting helped cement market expectations of an interest rate hike in November. The dollar slipped to 117.11 yen from 117.46 yen.

[R]5:00AM Gold an silver finish higher on Wednesday on Fed decision.[/R]
December gold gained $3 to settle at $586.20 a troy ounce on the NYME, while December silver added 19.5 cents to $11.14 an ounce. October platinum futures sank $14.90 to $1,140 an ounce while December palladium lost $2.70 to $306.35 an ounce. The December copper contract advanced 0.05 cent at $3.3760 per pound.

October light sweet crude oil declined $1.20 at $60.46 per barrel. Gasoline for October delivery fell 3.67 cents to $1.4671 per gallon. October-delivery heating-oil futures shed 4.38 cents a gallon to $1.6478, the lowest level since Feb. 16. October natural gas lost 7.5 cents at $4.931 a million British thermal units. On the New York Board of Trade, December Arabica coffee futures were off 1.15 cents at $1.0195 a pound. Futures on raw sugar in foreign ports for October dropped 0.18 cent at 12.12 cents a pound.