Europe Hits 5-Year High

Ivaylo
07 Nov, 2006
New York City

European stocks advanced on Tuesday morning after some positive comments on the U.S. economy from a Federal Reserve official, countering some early earnings-related weakness from companies such as French media giant Vivendi. Oil stocks rose after a bounce in crude oil prices overnight and supported energy shares. By mid morning, London FTSE 100 was flat, Frankfurt Xetra Dax added 0.1%, and the CAC 40 in Paris gained 0.3%.

[R]6:30AM European markets advance in early trading Tuesday on oil and banks.[/R]
European markets were mostly higher on Tuesday. By mid morning, London FTSE 100 was flat at 6,224.5, Frankfurt Xetra Dax added 0.1% to 6,334.85, and the CAC 40 in Paris gained 0.3% to 5,417.81.

Advancers

Strong results from Deutsche Postbank, the biggest retail bank in Germany. The company said its third-quarter net profit rose 16.7%, as interest income climbed nearly 14 %. The shares gained 2.2%.

Repsol of Spain gained 1.7%. JPMorgan raised its target price on the stock, but kept its underweight rating. Neste Oil, the Finnish refiner, gained 1.1%, while BP in Britain gained 0.8%.

Telecom Italia gained 1.2% after reporting a surprise 3.5% rise in net income and added it considering the sale of its Brazilian mobile division and had already received two offers

Marks & Spencer led the advance on the FTSE 100 after reporting a forecast-beating 32% jump in first-half pre-tax profit. Its shares gained 4.7%.

Decliners

Vivendi fell 3% after reporting a smaller-than-forecast rise in third-quarter sales and receiving a broker downgrade from Merrill Lynch.

Shares in Yell Group dropped 2.5% in London after reporting a 44% first-half profit decline on the costs of buying TransWestern and TPI.

Oil and gold

Oil eased but stayed in sight of $60 on Tuesday after leading OPEC producer Saudi Arabia held out the prospect of deeper output cuts to remove excess supply. U.S. crude oil was off 11 cents at $59.91 a barrel. London Brent was down 11 cents at $59.64.

Gold rose, resuming a four-week rally as a drop in the dollar spurred demand for an alternative asset. Gold for immediate delivery rose $1.30, or 0.2%, to $624.70 an ounce in early session in London.

Currencies

The U.S. dollar was at $1.2756 per euro from $1.2724 yesterday. The Japanese yen climbed to 117.84 per dollar in early trading in London from 118.31 in New York yesterday. Against the euro, the British pound was at 67.00 pence in London from 67.07 on Nov. 3. The U.K. currency was also at $1.9039 from $1.8971.

[R]5:00AM Gold futures declined Monday due to profit-taking, silver advances.[/R]
December gold declined $1.30 to end at $627.90 a troy ounce on the NYME. December silver gained 12.5 cents to to settle at $12.76 an ounce. January platinum fell $12.70 to $1,196.70 an ounce while December palladium gained 60 cents to $335.70 an ounce. Most-active December copper rose 1.45 cents to close at $3.3370 per pound.

The front-month December crude oil contract settled 88 cents higher at $60.02 a barrel. December heating oil led a rise in products, settling up 4.09 cents to $1.7184 a gallon. December unleaded gasoline added 2.21 cents to end at $1.5290 a gallon. December natural gas slipped 39.4 cents to finish at $7.490 per million British thermal units.

On the New York Board of Trade, December Arabica coffee futures moved 0.75 cent higher at $1.1320 a pound. Futures on raw sugar in foreign ports for March settled 0.44 cent higher at 11.75 cents a pound