Europe Advances on Software, Autos

Ivaylo
08 Jan, 2007
New York City

European equity markets made an upbeat start to the new week on Monday, led higher by strength in the software, carmakers and aerospace sectors. Saint-Gobain led the gainers with a rise after BNP Paribas raised its price target on the stock. Shares in auto companies such as Volkswagen and Peugeot were higher after they released sales figures. By mid-morning, the U.K. FTSE 100 index rose 0.3%, while the German Xetra Dax added 31.4 points or 0.5% and the French CAC 40 rose 25.3 points or 0.5%.

[R]6:30AM Europe higher on Monday on firm software, auto and aerospace shares.[/R]
European markets advanced on Monday. By mid-morning, the U.K. FTSE 100 index rose 0.3% to 6,240.30, while the German Xetra Dax added 31.4 points or 0.5% at 6,624.5 and the French CAC 40 rose 25.3 points or 0.5% at 5,542.7.

Advancers

Saint-Gobain led gainers with a rise of 2.8 % after Exane BNP Paribas raised its price target and reiterated an outperform recommendation. Safran rose 2.6% in spite of a downgrade for the French aerospace company from Citigroup which reduced its price target and reiterated a sell recommendation.

SAP added 2.3% ahead of the German software giant fourth quarter sales figures with an upbeat buy note from ABN Amro helping to boost sentiment.

British Airways shares climbed 1.1% after it said that its unions have agreed to recommend changes to its pension scheme. Budget airline EasyJet rose 1.8% after it said that the number of passengers it carried in December rose 11.2% to 2.6 million from the same point a year ago

Volkswagen said over the weekend that it sold 5.73 million vehicles in 2006, up 9.3% from the previous year. It shares rose 1.7%. Peugeot Citroen shares rose 1.3% early Monday after it estimated 2007 demand would come in at least at the same level as in 2006 and said sales in markets outside Western Europe continue to increase, led by the launch of new Peugeot and Citroen models. Luxury-car maker Porsche rose 2.6% after it was upgraded to buy at Goldman Sachs.

Decliners
There were no notable decliners in early European trade.

Oil and gold

Light, sweet crude for February delivery rose 27 cents to $56.58 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude for February delivery rose 43 cents to $56.07 a barrel on the ICE Futures exchange in London.

Purchases from jewelers and investors lifted the price of gold on Monday. Gold hit a low of $606.20 an ounce before rebounding to hit an intraday high of $609 an ounce

Currencies

The British pound rose versus the euro last week after reports showed house-price inflation at an 18-month high, mortgage approvals at the highest in three years, and service industry growth at the fastest in a decade. Against the euro, the pound was at 67.32 pence in early trade in London from 67.38 pence on Jan. 5. It also traded at $1.9326, from $1.9296. The dollar slipped 0.1% to $1.3016 against the euro.

The yen rose for a third day against the dollar on speculation central bank chiefs from the Group of 10 nations meeting in Basel, Switzerland today will say Asia and Europe are able to withstand a slowdown in the U.S. The yen traded at 118.45 against the dollar in London, from 118.63 late on Jan. 5 in New York.

[R]5:00 AM Precious metals declined as the dollar firmed on strong US jobs report.[/R]
February gold lost $19.30 to end at $606.90 a troy ounce on the New York Mercantile Exchange and March silver dipped 60.5 cents to $12.23 an ounce. April platinum declined $23.50 to $1,112 an ounce while March palladium slipped $10.45 to close at $335.10 an ounce. The most-active March copper contract shed 6.70 cents to settle at $2.5350 per pound, its lowest level since April.

The February crude oil contract gained 72 cents to finish at $56.31 a barrel. February heating oil settled up 2.27 cents at $1.5658 a gallon. February natural gas settled up 2.2 cents at $6.184 per million British thermal units. The February gasoline contracts advanced 6.2 cents to close at $1.487 a gallon.

On the New York Board of Trade, March Arabica coffee futures contract closed 4.55 cents down at $1.2045 a pound. Futures on raw sugar in foreign ports for March lost 0.18 cent to end at 11.09 cents.