Europe Sharply Lower

Ivaylo
22 Sep, 2006
New York City

European stock markets fell on Friday after a surprisingly weak Philadelphia-area manufacturing survey put fuel on recession fears across the globe. Technology and travel stocks were among lead decliners in morning trade, while Altana bucked the downtrend after its agreement to sell its pharmaceutical division. The FTSE 100 dropped 1% to 5,835.5, the Xetra Dax in Frankfurt fell 1.1% to 5,898.07 and the CAC-40 fell 1% to 5,154.11.

[R]6:30AM European markets fall sharply on Philadelphia Fed data.[/R]
European markets declined on Friday. The FTSE 100 dropped 1% to 5,835.5, the Xetra Dax in Frankfurt fell 1.1% to 5,898.07 and the CAC-40 fell 1% to 5,154.11.

Corporate News

KPN agreed to sell its entire remaining 8% stake in the telecoms group. The government will sell about 87 million ordinary shares through an accelerated bookbuilding and a further 80 million ordinary shares will be repurchased by KPN, which will then cancel them. KPN fell 1.8%.

Advancers

Altana, the German pharmaceuticals and chemicals group rose 1.4%. On Thursday, Altana said it would sell its drugs business to Nycomed. Euronext, the operator of the Paris, Brussels, Amsterdam and Lisbon bourses added 1.7%. Metrovacesa added 4.3% after the two largest shareholders battling for control of largest property group in Spain failed to achieve a decisive position.

Decliners

Commerzbank fell 2.5% after Dresdner Kleinwort lowered its price target and Renault shares were down 0.8% in Paris after reports emerged overnight that talks between the French company and General Motors Corp. evaluating a possible alliance have stalled. Oil futures added 32 cents to stand at $61.91 a barrel, putting some pressure on airlines such as British Airways, trading down 1.3%., and auto stocks such as Volkswagen moving down 1.2%.

Oil and Gold

Oil prices advanced on Friday, bouncing back from a midweek drop sparked by figures showing a surge in U.S. distillate supplies. Light, sweet crude oil for November delivery gained 32 cents to $61.91 a barrel in electronic trading on the NYME. The gold bullion opened Friday at a bid price of $586.45 a troy ounce, up from $579.20 late Thursday.

Currencies

The euro rose against the U.S. dollar on Friday as traders favored the common currency after weak economic reports in the United States. In morning trading, the euro rose to $1.2818, up from $1.2766 late Thursday in New York. The British pound advanced to $1.9053 from $1.8990 late Thursday and the dollar slipped to 116.36 Japanese yen from 116.61 yen.

[R]5:00AM Gold futures rose but were bound in a narrow trading range.[/R]
December gold futures ended $2.10 higher at $588.30 a troy ounce on the NYME while December silver was up 10.5 cents at $11.245 an ounce. October platinum dipped 50 cents lower at $1,139.50 an ounce while December palladium finished up $2.65 at $309 an ounce. December copper rose 5.55 cents to settle at $3.4315 per pound.

November light sweet crude oil settled down 85 cents at $61.59 a barrel while October
heating oil advanced 3.1 cents to end at $1.6788 a gallon. Gasoline moved up 3.23 cents at $1.4994 a gallon. October natural gas sank 15 cents to close at $4.781 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed up 1.60 cents at $1.0355 a pound and March gained 1.65 cents to $1.0740 a pound. Futures on raw sugar in foreign ports for October contract slipped 0.56 cent to finish at 11.56 cents a pound and March lost 0.54 cent to end at 12.35 a pound.