Banks Push Europe Higher

Ivaylo
06 Dec, 2006
New York City

European stocks gained on Wednesday, with banks leading the gainers after investors welcomed forecast-beating results from Anglo Irish Bank and an upbeat trading statement from Royal Bank of Scotland. Declines were coming, though, from more defensive sectors, including utilities and health care companies. By mid morning, the FTSE 100 in London climbed 0.2%, Frankfurt Xetra Dax was fractionally higher, and the CAC 40 in Paris gained 0.1%.

[R]6:30AM European markets advance modestly on Wednesday on banks.[/R]
European stocks were higher on Wednesday. By mid morning, the FTSE 100 in London climbed 0.2%to 6,099.9, Frankfurt Xetra Dax was fractionally higher at 6,372.75, and the CAC 40 in Paris gained 0.1%to 5,363.43.

Advancers

Anglo Irish Bank gained 3% after reporting a better-than-expected 38% rise in full-year pre-tax profit and gave a bright outlook on its future prospects. Domestic rival Allied Irish Banks was boosted by the news, up 2.4%, while Bank of Ireland rose 1.4%.

Royal Bank of Scotland rose 3.4% after delivering a pleasing trading update, forecasting full-year 2006 profits ahead of market expectations thanks to strong organic income growth. Other UK banks were also higher. Lloyds TSB gained 1.7% and HBOS added 2.4%.

Decliners

IT services group Capgemini shares dropped 3.4% after it said it is going to issue 10.4 million shares worth 455 million euros ($606 million) to give it room to maneuver and participate in possible future industry consolidation.

ITV shares slipped 0.4% after NTL Inc said it has no present intention of making an offer for ITV, the U.K. commercial broadcaster. In a statement, NTL said a deal between itself and ITV is unlikely to be attained on terms acceptable to NTL.

Oil and gold

Oil prices traded in a narrow range Wednesday ahead of the release of weekly U.S. petroleum inventory data, which is expected to show higher supplies. Light, sweet crude for January delivery fell 10 cents to US$62.33 a barrel on the New York Mercantile Exchange by midday in Europe. The contract had fallen a penny Tuesday to settle at US$62.43 a barrel. January Brent crude at London''s ICE Futures exchange fell 1 cent to US$63.31 a barrel.

Gold traded in London at $636.75 per troy ounce, down from $643.25 late Tuesday. In Zurich, gold fell to $634.90 from $640.25. Silver fell to $13.62 per troy ounce in London, down from $13.95.

Currencies

The U.S. dollar rose Wednesday against other major currencies in European trading. The euro was quoted at $1.3276, down from $1.3325 late Tuesday. Other dollar rates compared with late rates Tuesday included: 114.97 Japanese yen, up from 114.81; 1.1960 Swiss francs, up from 1.1914, and 1.1425 Canadian dollars, up from 1.1411. The British pound was quoted at $1.9645, down from $1.9743.

[R]5:30AM Gold and silver prices fell Tuesday on stronger dollar, weaker oil.[/R]
February gold slipped $3 to settle at $647.90 a troy ounce on the NYME. March silver lost 22 cents to end at $14.025. January platinum settled down $26.30 at $1,133.70 an ounce. March palladium shed 5 cents to finish at $336.40. The most active March copper contract settled up 7.10 cents at $3.2470 per pound.

January crude oil slid 1 cent to end at $62.43 a barrel. January heating oil declined 1.06 cents to $1.7983 a gallon. January unleaded gasoline settled down 3.10 cents to $1.6364 a gallon. December natural gas fell 12.1 cents to close at $7.685 a million British thermal units.

On the New York Board of Trade, Arabica coffee futures raced to 10-month highs after industry-buying curbed a morning dip. December closed 3.20 cents higher at $1.2340 a pound. March futures of raw sugar in foreign ports remained unchanged at 11.76 cents a pound.