Flat Trading in Europe

Ivaylo
13 Oct, 2006
New York City

In Europe, a number of banking stocks fell as investors resorted to profit taking. Banca Intesa and Sanpaolo IMI, prospective Italian merger partners, were both lower in spite of the boards of both companies approving the merger. French cosmetics company L''Oreal and some weakness in the resource sector helped also offset technology stock gains. By mid morning, the FTSE 100 in London was little changed, the CAC 40 in Paris was 0.1% lower and Frankfurt Xetra Dax also remained also flat.

[R]6:30AM European markets lower on profit taking in the banking sector.[/R]
European markets were flat-to-lower by mid morning on Friday. The FTSE 100 in London was little changed at 6,122.4, the CAC 40 in Paris was 0.1% lower at 5,355.08 and Frankfurt’s Xetra Dax also remained flat at 6,161.34.

Advancers

Oil stocks were higher as crude prices held above $58 a barrel after a surprise drop in heating oil stocks. Neste Oil, the Finnish refiner, gained 1.5%, while Norsk Hydro rose 1.4%. Michelin, the French tyre maker, gained 2.4% after Deutsche Bank raised its price target for the company.

Decliners

Banks dipped in early trading. Intesa fell 2.1%, Sanpaolo shed 2.3%, while Santander lost 0.7%. Credit Suisse downgraded both Intesa and Sanpaolo from overweight to neutral, telling investors to lock in profits.

French cosmetics group L''Oreal shares slipped 2.9% after the company said that sales invoiced in North America have been held back by turbulence in the distribution sector.

Oil and gold

Oil prices gained Friday on news that U.S. heating oil inventories dropped and that Norway ordered production shut down at two offshore platforms, sharply reducing flows from the world''s third-largest oil exporter. Light, sweet crude oil for November delivery gained 33 cents to $58.19 a barrel on the NYME.

Gold opened Friday at a bid price of $577.85 a troy ounce, up from $577.03 late Thursday.

Currencies

Against the euro, the U.S. dollar traded at $1.2551, from $1.2556 late yesterday. It was also at 119.41 yen, from 119.38.

[R]5:30AM Gold and silver futures rose slightly on Thursday, as oil rebounded.[/R]
December gold advanced $3.80 to $580.30 a troy ounce on the NYME as well as December silver which added 5 cents to $11.38 an ounce. January platinum gained $1.80 to $1,074.60 an ounce but December palladium declined $1.05 to $307.90 an ounce. The most-active December copper contract fell 2.35 cents to settle at $3.3865 per pound.

The November crude oil contract rose 27 cents to end at $57.86 a barrel after hitting a 10-month low of $57.22 earlier in the session. The November heating oil contract settled up 1.57 cents at $1.6877 a gallon and November gasoline closed largely steady at $1.4509 a gallon. October natural gas settled down 36.8 cents at $5.782 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures ended up 0.25 cent at $1.0330 a pound. Futures on raw sugar in foreign ports for March advanced 0.4 cent to finish at 11.13 cents a pound.