Europe Starts New Year Higher

Ivaylo
02 Jan, 2007
New York City

European stocks advanced to a six-year high in the first day of trading this year on utility stocks, lifted by bid talk about a takeover offer on Suez. Spanish building and construction companies benefited through their stakebuilding last year in the energy and utility sectors. By mid morning, FTSE 100 in London climbed 1%, Frankfurt Xetra Dax gained 1% and the CAC 40 in Paris added 1.3%.

[R]6:30 AM European markets were higher on Tuesday on utilities, industrial groups.[/R]
European markets were higher on Friday. By mid morning, FTSE 100 in London climbed 1% to 6,281.5, Frankfurt Xetra Dax gained 1% to 6,659.90 and the CAC 40 in Paris added 1.3% to 5,610.76.

Advancers

French billionaire Francois Pinault announced he would not rule out a takeover offer on Suez, whose 80 billion euro merger with Gaz de France was uncertain. Suez shares gained 1.5%, while Gaz de France added 1 %.

Mr Pinault was anticipated to break up Suez if he succeeded with a bid and sell the energy business to GDF, while the waste management and water assets were expected to be acquired by Veolia Environment. Norway Renewable Energy was boosted 3.5%.

Spain Gas Natural rose 2.6% and Iberdrola added 1.8% after the Spanish government approved higher tariffs last week.

Acciona, which bought a stake in power generator Endesa, gained 2.4%, while ACS which acquired holdings in both Union Fenosa and Iberdrola, added 1.5%.

France BNP Paribas boosted the banking sector as it gained 2.5%. It was the most active advisor to French companies on mergers and acquisitions in 2006. BBVA gained 2.4%, Banco de Sabadell added 2.5% and Banco Popular climbed 2.6%.

Decliners

There was only one notable decliner in early European trade. Shares in Veolia were down 3.6%.

Oil and gold

Oil rebounded to $61.34 a barrel in New York and Brent crude also advanced. Crude oil for February delivery advanced 29 cents, or 0.5%, to $61.34 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The contract traded at $61.24 in early trade London. Brent crude for February settlement rose 39 cents, or 0.6%, to $61.25 a barrel on the ICE Futures exchange

Gold climbed to a three-week high in London on rumors investors will buy the metal as an alternative to the dollar. Gold for immediate delivery rose $4, or 0.6%, to $640.80 an ounce in early trade in London.

Currencies

The euro welcomed new member Slovenia by advancing against the dollar in early European trading on Tuesday. The 13-nation European currency bought $1.3277, up from $1.3163 in late Friday trading in New York. The dollar also dipped against the British pound, which bought $1.9715, up from $1.9613 on Friday. Against the Japanese yen, the dollar slipped to 118.72 yen from 118.90 yen on Friday.

[R]5:00 AM Gold closed higher in thin trading Friday, copper futures declined.[/R]
The most-active February gold gained $1.10 to close at $638 a troy ounce while March silver ended 0.5 cent lower at $12.935 an ounce. January platinum finished $23.10 higher at $1,139.30 an ounce, after a late flurry of buying. March palladium advanced $10.55 to end at $338.50 an ounce. The most-active March copper contract fell 2.4 cents to settle at $2.8710 a pound on the Nymex.

In Nymex energy trading, the front-month February crude oil contract ended 52 cents, or 0.9%, higher at $61.05 a barrel. It was crude oil fifth straight annual gain. January heating oil shed 2.52 cents, or 1.55%, to close at $1.5979 a gallon. January unleaded gasoline dropped 4.02 cents, or 2.54%, to settle at $1.5419 a gallon. February natural gas futures closed 5.1 cents higher at $6.299 a million British thermal units.

March Arabica coffee closed 1.2 cents higher at $1.2620 a pound, and May coffee finished 1.25 cents higher at $1.2920 a pound. March raw sugar futures finished 0.11 cents lower at 11.75 cents a pound, while May sugar closed 0.07 cents lower at 11.71 cents a pound.