Mergers, Commodities Boost Europe

Ivaylo
02 Oct, 2006
New York City

Gains from commodities companies such as oil and gold helped European stocks start the fourth quarter on a positive note Monday, although shares in online gambling companies including PartyGaming plunged in London after a law was passed that may lead to companies to stop accepting bets from their top customers, Americans. The FTSE 100 in London climbed 0.2%, Frankfurt Xetra Dax added 0.3% and in Paris, the CAC 40 gained 0.2%.

[R]6:30AM Merger hopes and commodities lift Europe on Monday.[/R]
European markets were higher by mid-morning on Monday. The FTSE 100 in London climbed 0.2% to 5,972.7, Frankfurt Xetra Dax added 0.3% to 6,021.65 and in Paris, the CAC 40 gained 0.2% to 5,261.69.

In focus

There was activity again in the utilities sector. EDP in Portugal gained 2.3% after reports in the Spanish press that it could form a friendly merger with Spain’s Gas Natural.

Advancers

RWE gained 1.8% , while Enel, which HSBC initiated at neutral, rose 0.2%. Ahold added 0.5% on reports its US Foodservice unit could be the target of private equity bids.

Decliners

Partygaming led the declines, falling 55.6%. Austria’s Bwin Interactive fell 17.3%. Telekom Austria fell 6.8% after investment bank UBS cut its rating on the company from buy to neutral and lowered its price target.

Oil and gold

Light, sweet crude for November delivery rose 12 cents to $63.03 a barrel in electronic trading on the NYME. November Brent crude on the ICE futures exchange in London rose 22 cents to $62.70 a barrel. Gold opened Monday at a bid price of $602.20 a troy ounce, up from $595.70 late Friday.

Currencies

The euro bought $1.2672 in morning European trading, compared with $1.2678 in New York late Friday. The British pound slid to $1.8689 from $1.8710. The dollar climbed Monday to 118.27 Japanese yen from 118.11 yen.

[R]5:30AM Gold and silver slipped on Friday on stronger dollar, technical factors.[/R]
December gold fell $6.70 to finish at $604.20 a troy ounce on the NYME. December silver gave up 19.5 cents to close at $11.54 an ounce. October platinum fell $4.80 to close at $1,141.20 an ounce. December palladium settled with a loss of $7.70, at $316.40 an ounce. In other metals trading, the December copper contract lost 3.25 cents to end at $3.4605 per pound.

The front-month November light, sweet crude oil contract rose 15 cents to close at $62.91 a barrel. October heating oil fell 2.92 cents to finish at $1.6846 a gallon. Front-month October unleaded gasoline rose 4.81 cents to $1.5492 a gallon. December natural gas futures settled 30.8 cents higher at $7.34 per million British thermal units. On the New York Board of Trade, Arabica coffee futures rose slightly in end-of-quarter activity. October raw sugar finished 0.30 cent higher at 10.85 cents a pound.