Utilities Boost Europe

Ivaylo
26 Sep, 2001
New York City

European stocks advanced Tuesday on positive sentiment coming from U.S. markets, while shares of Europe leading utilities moved higher after Acciona interfered into the bid war for Endesa. By mid morning, European markets had extended their gains following Ifo business confidence data in Germany that came in line with expectations. London FTSE 100 gained 0.7%, while Frankfurt Xetra Dax added 0.6% and the CAC 40 in Paris climbed 1%.

[R]6:30AM Spanish utilities supported Europe higher on Tuesday.[/R]
European markets were higher by mid morning on Tuesday. London FTSE 100 gained 0.7% to 5,836.6, while Frankfurt Xetra Dax added 0.6% to 5,97.74 and the CAC 40 in Paris climbed 1% to 5,195.96.

M&A

The bid for Spain largest utility Endesa warmed up after Acciona, the Spanish conglomerate bought 10% of the company late on Monday, and said it may purchase more, potentially blocking the bid by Germany Eon.

Advancers

Acciona’s move however, sparked a flurry of activity in the Spanish utility sector, sending Iberdrola 3% higher. Metrovacesa continued its rally following recent bid hopes as major shareholders battled for control of the company. Metrovacesa’s shares rallied 5%.

Linde, the German industrial gases group, rose 3.7% on hopes the company would sell its forklift division for a high price. Vivendi, the French media and telecoms group, had offered to buy a 49% stake in Polish mobile operator PTC from Deutsche Telekom. Vivendi shares gained 0.6% and Deutsche rose 0.3%.

Oil stocks enjoyed a better day after crude prices rallied overnight. Statoil climbed 2.9%, and Austria OMV gained 2%.

Decliners

E.On, which is trying to buy Endesa, slid 2.2% and Ryanair Holdings shares declined 1.9% after it said that it has hedged its fuel requirements between January and March 2007 at a rate equivalent to $73 per barrel of Brent crude.

Oil and gold

Oil held above $61 on Tuesday after recovering from a six-month low as dealers focused on whether OPEC might trim output should prices fall further. U.S. crude sank four cents to $61.41 a barrel by mid morning, while London Brent slipped 12 cents at $60.68 a barrel. Gold advanced more than one percent on Tuesday tracking higher crude oil prices. Gold hit a high of $593.75 an ounce, its highest in nearly two weeks, and was quoted at $589.30/590.30.

Currencies

The euro fell against the U.S. dollar on Tuesday as fears of lower inflation data from the European Union undermined the common currency. In morning trading, the euro was down to $1.2743 from $1.2757 late Monday in New York. The British pound dropped to $1.8989 from $1.9014 late Monday. The dollar fell to 116.34 Japanese yen from 116.48 yen.

[R]5:00AM Gold and silver futures bounce back on oil rally.[/R]
December gold advanced 50 cents at $595.90 a troy ounce on the NYME after trading as low as $587.50. December silver gained 1.5 cents at $11.325 after a low of $11.13. October platinum finished down $14.90 to $1,133.20 an ounce, while January fell $13.40 to $1,144.20. December palladium settled $4.45 lower at $317.20 an ounce. December copper rose 0.40 cent at $3.4475 per pound.

The November crude oil contract gained 90 cents higher at $61.45 a barrel after trading in a wide range of $59.52-$62.15. The October gasoline contract added 2.89 cents at $1.5001 a gallon and October heating oil moved up 0.92 cent at $1.6564 a gallon. October natural gas settled down 15.2 cents at $4.485 a million British thermal units. On the New York Board of Trade, December Arabica coffee futures ended up 2.20 cents at $1.0665 a pound. Futures on raw sugar in foreign ports for October sank 0.71 cent at 9.75 cents a pound.