Metals, Oil Boost Europe

Ivaylo
05 Oct, 2006
New York City

European stocks advanced in morning trade on Thursday, supported by deal speculation pushing shares of steelmaker Corus higher, a turnaround for oil and metals producers, and the second straight record high for the U.S. markets. Oil stocks gained ground from an overnight rally in crude prices. London FTSE 100 climbed 0.6%, Frankfurt Xetra Dax gained 0.6% and the CAC 40 in Paris added 0.6%.

[R]6:30AM European markets buoyed by M&A, oil, and mining stocks on Thursday.[/R]
European markets were higher by mid-morning on Thursday. London FTSE 100 climbed 0.6% to 6,002.8, Frankfurt Xetra Dax gained 0.6% to 6,083.73 and the CAC 40 in Paris added 0.6% to 5,289.72.

In focus

Steelmakers are among the stocks riding high on merger speculation after rumours that Tata Steel of India was approaching Corus, the Anglo-Dutch group with an offer.

Advancers

Oil companies were higher. OMV, the Austrian oil group, rose 3%, while Finnish refiner Neste Oil gained 2.7%. Total in France gained 1.2% and Britain’s BP added 1.4%.

Commodities were also on the increase. Corus shares jumped 10.4% in Amsterdam, while Thyssenkrupp in Germany added 3.1% and Salzgitter added 1.6%.

Decliners

British Airways shares were flat after Citigroup downgraded the carrier to hold from buy, citing lighter-than-expected September traffic and the firm reduced fiscal 2007 revenue guidance.

Oil and gold

Oil leapt more than 1 percent to above $60 a barrel on Thursday. U.S. crude oil jumped 67 cents to $60.08 a barrel. London Brent rose 56 cents to $59.78, having recovered from a low of $57.70, its weakest this year. Gold was trading at $567.20 an ounce, down $9.40 an ounce from Wednesday close of $576.60.

Currencies

The euro was barely changed against the U.S. dollar Thursday ahead of a meeting at which the European Central Bank was widely expected to raise its key interest rate. The euro bought $1.2711 in morning European trading, compared with $1.2713 in New York late Wednesday.

With the Bank of England also meeting Thursday, the British pound bought $1.8861, barely below Wednesday''s level of $1.8864. The dollar slipped to 117.66 Japanese yen from 117.89 yen.

[R]5:00AM Gold retreats Wednesday on speculative selling.[/R]
December gold fell $14.80 to settle at $566.70 a troy ounce on the NYME. December silver sank 25 cents at $10.795 an ounce. October platinum closed at $1,082.40 an ounce, down $47.50. December palladium finished at $296.65 an ounce, down $9.80. December copper lost 7.70 cents to close at $3.2055 per pound.

The November crude oil contract ended 73 cents higher at $59.41 a barrel after falling as low as $57.70 a barrel, the lowest level for a front-month contract since Feb. 16. November gasoline moved up 4.11 cents to $1.4978 a gallon. November heating oil rose 2.31 cents to stop at $1.6770 a gallon. October natural gas settled up 23.6 cents at $5.995 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed up 0.20 cent at $1.0445 a pound and March gained 0.25 cent at $1.0835. Futures on raw sugar in foreign ports for March advanced 0.27 cent at 11.16 cents a pound.