European Stocks Advance on Banks

Ivaylo
13 Dec, 2006
New York City

European stocks advanced slightly on Wednesday owing to strong results from the banking sector, while retail stocks did not fail to outperform in the run up to Christmas. Investors eyed news from companies such as Spanish retailer Inditex. The company announced that its net income for the first nine months of 2006 rose 22%. By mid morning, FTSE 100 in London was up 0.1%, Frankfurt Xetra Dax was flat, and the CAC 40 in Paris was 0.1% higher.

[R]6:30AM European markets move slightly higher Wednesday as banks rally.[/R]
European markets were higher on Wednesday. By mid morning, FTSE 100 in London was up 0.1% to 6,160.7, Frankfurt Xetra Dax was flat at 6,476.33, and the CAC 40 in Paris was 0.1% higher at 5,434.65.

Advancers

Inditex, owner of the Zara, Pull and Bear and Massimo Dutti clothing brands, advanced 4.6% as its net income for the first nine months of 2006 grew 22% to 634 million euros as revenue also rose 22%, to 5.67 billion euros.

Raiffeisen International, the Austrian bank with significant operations in central and eastern Europe, including Russia, advanceed 2.6%, after Citigroup upgraded it to buy and raised its price target.

Erste Bank, another Austrian bank which also has substantial holdings in eastern Europe, gained 1%. Dutch bank ABN Amro advanced 3.3% after putting forward impressive strategy for next year.

Fashion retailer Hennes & Mauritz gained 0.6% in Stockholm, while London-listed peer Next advanced 1.9%.

Lagardere, the largest publishing group in France, rose 3.5% in Paris after UBS analysts upgraded their rating on the media company to buy from neutral.

Decliners

Safran, the French aero engine maker, fell 6.4% after reducing its full-year operating profit margin target to 4% from its previous goal of 5.5-6%.

Oil and gold

Crude oil held near a two-week low after the IEA reduced its forecast for Chinese demand. Crude oil for January delivery fell 13 cents to $60.89 a barrel in after-hours electronic trading on the New York Mercantile Exchange in early trading in London. Brent crude fell 31 cents, or 0.5%, to $61.21 a barrel and traded at that price on the ICE Futures exchange in London.

Gold declined in London for a second straight day as oil prices traded close to the lowest in two weeks. Gold for immediate delivery in London fell as much as $1.70, or 0.3%, to $628.35 an ounce.

Currencies

The U.S. dollar traded mixed versus other major currencies in European trading Wednesday. The euro was at $1.3268, down from $1.3277 late Tuesday. The British pound traded at $1.9711, up from $1.9700. The dollar bought 117.08 Japanese yen, up from 116.90.

[R]5:00AM Gold and silver futures slipped as market awaited FOMC decision.[/R]
February gold declined $3.10 to end at $631.70 a troy ounce on the New York Mercantile Exchange and March silver shed 4.5 cents to $13.98 an ounce. In later trading, the metal rebounded by 2 cents. January platinum settled up $5.80 to $1,115 an ounce while its sister metal palladium lost $2.85 to close at $330.90 an ounce. March copper contract dipped 3.90 cents to settle at $3.0945 per pound.

January crude oil slid 20 cents to finish at $61.02 a barrel and January heating oil declined 0.19 cent to $1.7224 a gallon. January unleaded gasoline lost 0.38 cent to end at $1.5950 a gallon. January natural gas advanced 0.3 cent to close at $7.430 a million British thermal units.

On the New York Board of Trade, March Arabica coffee futures finished 0.90 cent lower at $1.2775 a pound. Futures on raw sugar in foreign ports for March moved 0.05 cent lower at 11.37 cents a pound.