Flat Start for Europe

Ivaylo
27 Nov, 2006
New York City

Worries flourish over the influence of the slipping dollar on companies which generate a high proportion of their earnings in the US. Dollar-sensitive stocks such as software company SAP countered gains from some commodity based stocks and upbeat results from drugmaker Bayer. The U.K. FTSE 100 index lost 0.04%, while the German Xetra Dax traded 19 points or 0.2% lower and the French CAC 40 lost 15 points or 0.3 %.

[R]6:30AM European markets were lower in early trading on Monday on weak dollar.[/R]
European markets were lower in early trading on Monday. The U.K. FTSE 100 index lost 0.04% at 6,119.80, while the German Xetra Dax traded 19 points or 0.2% lower at 6,392.96 and the French CAC 40 lost 15 points or 0.3% at 5,374.4.

Advancers

Pharmaceutical and chemical firm Bayer rose 2.2% after it produced a third-quarter net profit that exceeded analyst forecasts and also raised its fiscal-year guidance for its healthcare operations.

Miners Rio Tinto and BHP Billiton saw their shares rise more than 0.7%, while shares in oil companies BP tacked on around 0.3% each. U.K. home builders were also in the news as consolidation hopes surged in the sector. Shares in Wilson Bowden rose 13.1% in early trading after the company confirmed that its in talks with a number of potential bidders. Dassault shares rose 0.8%, albeit with just 48 shares traded.

Decliners

Automakers were hit as the US dollar plunged against the euro. DaimlerChrysler fell 1.5% while BMW fell 1.7% to and Fiat fell 1%. BAE Systems dropped 2.5% in London after the Telegraph newspaper reported that the Saudi Arabia government may transfer a fighter jet deal from BAE Systems to Dassault Aviation of France. Oil services company Technip was down 3% after Eni of Italy said late Friday that it was not planning to bid for the company.

Oil and gold

Oil prices advanced Monday as the market opened after the long Thanksgiving weekend, but stayed within the range of the last eight weeks with little geopolitical or weather news to drive prices. Light sweet crude oil for January delivery rose 31 cents to $59.55 a barrel in electronic trading on the NYME.

Gold opened higher on Monday at $638.00 an ounce, up $4.20 an ounce from the close of $633.80 on Friday.

Currencies

The euro edged lower against the dollar on Monday following a steep climb last week, but remained above $1.31. The euro bought $1.3112 in morning European trading, down from the $1.3167 it bought over the weekend. The British pound declined to $1.9355 from $1.9463, while the dollar rose to 116.12 Japanese yen from 115.55 yen.

[R]5:00 AM Gold surges on weak dollar and economic fears over US growth.[/R]
Gold for December delivery was up $9.60 at $638.60 an ounce in electronic trading. Silver futures were up 43 cents at $13.47 an ounce. Platinum recovered from a steep sell-off Wednesday to trade up $34 at $1,188 an ounce. Palladium was up $4.95 at $330.95 an ounce. Copper rose 11.3 cents to $3.224 a pound.

Light sweet crude oil for January delivery rose 66 cents to settle at $59.90 a barrel in electronic trading on the NYME. Heating oil ended 3.05 cents higher at $1.6970 per gallon, unleaded gasoline rose 1.02 cent to settle at $1.5990, and natural gas finished 23.8 cents higher at $7.956 per 1,000 cubic feet.

Nickel advanced to its highest in at least 19 years on the London Metal Exchange. Nickel for delivery in three months climbed $250, or 0.8%, to $33,700 a metric ton . Corn futures for March delivery rose as much as 5.5 cents, or 1.4%, to $3.9150 a bushel, the highest since July 1996, in electronic trade on the Chicago Board of Trade.