European Markets Cautious at Start

Ivaylo
29 Dec, 2001
New York City

European stock traders were wary of taking up new positions on Friday, on the last trading day of the year, as trade was uneven with very thin volumes. Banking shares were in demand after ABN Amro said it was laying off workers and as Credit Agricole announced it was going to issue cheaper shares to help fund the acquisition of bank branches in Italy. By mid morning, London

[R]6:30 AM European markets were almost flat Friday as traders take to the sidelines.[/R]
European markets were nearly flat on Friday. By mid morning, London’s FTSE 100 shed 0.2% to 6,226.8, Frankfurt’s Xetra Dax was virtually unchanged at 6,609.2 and the CAC 40 in Paris gained 0.1% to 5,539.64.

Advancers

ABN Amro was in early focus. Its shares moved 0.1% higher after it said late Thursday it was reducing 900 jobs at its LaSalle operations in Chicago. ABN added that the move was part of a plan to cut expenses and enhance the operational performance of businesses in mature markets such as the U.S.

Although ABN Amro was much talked about, it was Suez which led the gainers, up 3.1%, following market talk of a bid for the French utility. Rumors that French billionaire Francois Pinault was considering a 70 billion euros bid spurred little response from Suez, save for declining to comment on market speculation.

Ferrovial, Spanish construction group, was another advancer, gaining 1.2% as it announced on Thursday night it had sold its property division for 1.6 billion euros to unlisted Promociones Habitat.

Decliners

As oil prices failed on Thursday to respond to the much larger than expected depletion in US crude stockpiles had a negative impact on energy stocks. BP shed 0.8%, while Royal Dutch Shell dipped 0.8 %. Repsol of Spain slipped 0.7%.

Credit Agricole was another decliner in Paris, shedding 0.4%, as it said it was about to issue 4 billion euros in cheaper shares to finance the acquisition of 663 Italian bank branches, including 202 branches of Banca Intesa.

Oil and gold

Oil prices retreated toward $60 a barrel on Friday on account of the unusually mild weather which reduced trade. U.S. crude oil futures shed nine cents to $60.44 a barrel in early trade in London. Brent crude gave up two cents to $60.65. Gold opened Friday at a bid price of $634.10 a troy ounce, up from $633.50 late Thursday.

Currencies

The euro traded a little higher on Friday versus the dollar, which slipped in spite of better-than-expected U.S. economic data the previous day. The euro bought $1.3163 in morning European trading, up from $1.3146 in New York late Thursday. The British pound, however, slipped to $1.9613 from $1.9628. The dollar was little changed against the Japanese yen, slipping to 118.90 yen from 118.93 yen

[R]5:00 AM Gold and silver end higher on Thursday, supported by weaker dollar.[/R]
At settlement, the top-traded February gold contract gained $6.60 to close at $636.90 a troy ounce on the New York Mercantile Exchange. March silver advanced 1.5 cents to end at $12.94 an ounce, after fund buying combined with selling at the high levels to keep the advance contained. January platinum added 50 cents to finish at $1,116.20 an ounce, while March palladium dipped 95 cents to close at $327.95 an ounce. March copper shed 1.9 cents to end at $2.8950 a pound.

On the Nymex, crude oil futures gained slightly following a report that displayed a surprisingly large fall in U.S. crude stocks. The February crude oil contract advanced 19 cents to $60.53 a barrel. January heating oil was up 1.43 cents to close at $1.6231 a gallon, and January unleaded gasoline slipped 0.54 cents to finish at $1.5821 a gallon. Natural gas for delivery in February added 10.6 cents to $6.248 a million British thermal units.

On the New York Board of Trade, Arabica coffee futures closed sharply down after an intraday rise attempt was thwarted by producer selling, year-end profit-booking and book-squaring. March coffee ended 3.9 cents lower at $1.2500 a pound, near the bottom of the trading range of the day of $1.2450 a pound to $1.2975 a pound.

Futures on raw sugar in foreign ports ended slightly higher. The market was aided by speculative and local buying, but producer and trade selling curtailed the ascent. March sugar futures ended 0.07 cents higher at 11.86 cents a pound.