Europe Buoyant on Banks

Ivaylo
14 Dec, 2006
New York City

European stocks gained on speculation companies are increasing earnings even as the world economy slows. HBOS advanced the most in two months after the biggest mortgage lender in Britain announced 2006 earnings will beat estimates. Rio Tinto Group and Xstrata Plc led the rally in mining shares after Cazenove stated metals demand remains strong. By mid morning, FTSE 100 in London climbed 0.3%, Frankfurt Xetra Dax gained 0.2%, and the CAC 40 in Paris added 0.4%.

[R]6:30AM European markets gained Thursday on strong banks, upbeat miners.[/R]
European markets were higher on Thursday. By mid morning, FTSE 100 in London climbed 0.3% to 6,212.3, Frankfurt Xetra Dax gained 0.2% to 6,536.59, and the CAC 40 in Paris added 0.4% to 5,499.28.

Advancers

HBOS of Britain was the main advancer in the banking sector, higher after a strong trading update. Its shares added 1.8%. Resource stocks also gained as Morgan Stanley lifted its price target on Xstrata, raising its shares 3.4%. Rio Tinto, the world second-largest mining company by market value, climbed 2 percent. BHP Billiton rose 1.4%. Goldman Sachs upgraded Norsk Hydro, the Norwegian oil, gas and industrial metals group, from neutral to buy, lifting its shares 2.9%.

ABN Amro, the Dutch bank, subject of bid speculation on Wednesday, gained 1.3 %, as traders stated they expected the most likely offer would come from domestic rival ING. ING shares were up 1.5%. Porsche, the German sports car maker, gained 2.4% after HVB raised its price target, keeping its buy rating

Oil and gold

Crude oil advanced on speculation that OPEC will enforce compliance with an earlier production reduction in high inventories and mild weather in the U.S. Crude oil for January delivery gained as much as 37 cents, or 0.6%, to $61.74 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $61.67 a barrel in early trade in London. Brent crude oil gained 17 cents to $61.50 a barrel on the London-based ICE Futures exchange. Gold for immediate delivery was little changed at $628.85 an ounce in London.

Currencies

The euro gained against the U.S. dollar on Thursday, finding its feet having lost the previous day on upbeat economic news from the United States. The euro bought $1.3226 in early trading, up from $1.3204 in New York late Wednesday. The British pound strengthened to $1.9677 from $1.9660. The dollar fell to 117.33 Japanese yen from 117.52 yen.

[R]5:00AM Gold advanced on Wednesday, supported by stronger oil futures.[/R]
The most-traded February gold contract gained 70 cents to end at $632.40 a troy ounce on the New York Mercantile Exchange, while the most-active March silver closed 6.5 cents down at $13.915 after probing a high of $13.98. January platinum finished lower at $1,107.80 an ounce, down $7.20. March palladium dipped $1.20 to close at $329.70 an ounce and March copper slipped 6.15 cents to end at $3.0330 per pound.

The January crude oil added 35 cents to to end at $61.37 a barrel and the January heating oil contract rose 0.96 cent to $1.7320 a gallon. Unleaded gasoline for January delivery climbed 2.24 cents to $1.6174 a gallon. January natural gas advanced 24.3 cents to close at $7.673 a million British thermal units.

On the New York Board of Trade, March Arabica coffee futures gained 1.10 cents to end at $1.2885 a pound. Futures on raw sugar in foreign ports for March lost 0.05 cent to finish at 11.32 cents a pound.