Construction Stocks Boost Europe

Ivaylo
09 Jan, 2007
New York City

Saint Gobain led the advancers in Europe, as the stock is in demand for a second session in a row as brokers are becoming aware of the potential value that restructuring could deliver for the French building materials group. Gains from travel stocks and mining companies also helped, although declines from oil giant BP kept sentiment in check. The U.K. FTSE 100 index rose or 0.3%, while the German Xetra Dax gained 0.7%, and the French CAC 40 added 0.7%.

[R]6:30 AM European markets advance on construction and leisure sectors.[/R]
European markets were higher on Tuesday. By mid-morning, the U.K. FTSE 100 index rose 17.2 points, or 0.3% to 6,210.60, while the German Xetra Dax gained 43.2 points, or 0.7%, to 6,651.49 and the French CAC 40 added 37.5 points, or 0.7%, at 5,566.10.

Advancers

Saint Gobain led the advancers with a gain of 5%. On Tuesday, ABN Amro upgraded its recommendation from hold to buy. Aegon rose 4%, helped by an upgrade from neutral to buy by Merrill Lynch.

Holcim was in demand for a second session in succession, gaining 2.3% following an upbeat assessment from the chief executive of the Swiss concrete maker. EADS added 1.3% on news of an order for 50 A320 aircraft from Air Asia which arrived as the market closed on Monday.

Travel stocks advanced in Europe as oil prices sank, with airline Deutsche Lufthansa rising 1.2% and Air France-KLM gaining 0.4% after posting a 3.3% rise in passengers carried in December.

Decliners

Shares in large-cap BP declined 1.7% after it said that it expects disappointing fourth-quarter results. U.K. retailer Marks & Spencer was another decliner, down 1.9% after strong recent gains. Merrill Lynch also downgraded German insurer Allianz to neutral from buy. Allianz shares lost 0.3%

Beiersdorf fell 1.6% on profit taking after the maker of Nivea skin cream reported a 7% increase in full-year sales in 2006.

Oil and gold

Crude oil declined for a second day in New York, falling below $56 a barrel, as mild weather in the U.S. cut heating fuel demand and increased stockpiles. Crude oil for February delivery fell 58 cents, or 1%, to $55.51 in after-hours electronic trading on the New York Mercantile Exchange. In London, Brent crude for February settlement declined 53 cents, or 1%, to $55.07 a barrel.

Gold rose for a second day in London on slowing sales by investment funds and increased demand from jewelers. Gold for immediate delivery rose $2.90, or 0.5%, to $612.90 an ounce in early trade in London.

Currencies

The euro retreated against the dollar. The euro was at $1.3030, from $1.3024. The yen fell to 119.17 against the dollar in early trade in London, from 118.78 late in New York yesterday. It traded at 155.28 per euro, from 154.71, after reaching a record 158.06 on Jan. 3. Against the euro, the pound was at 67.09 pence in London from 67.22 pence on Jan. 8. It also traded at $1.9418 versus the dollar, from $1.9378.

[R]5:00 AM Copper plunged to nine-month low, gold and silver gain modestly.[/R]
The most-active March copper contract plunged 0.70 cent to close at $2.5280 per pound Monday. February gold gained $2.50 to end at $609.40 a troy ounce and March silver rose 13 cents to finish at $12.36 an ounce. April platinum settled up $14.90 at $1,126.90 an ounce while March palladium declined $3 at $332.10 an ounce.

The front-month February crude oil contract lost 22 cents to close at $56.09 a barrel. Heating oil shed 0.87 cent to $1.5571 a gallon and reformulated gasoline fell 2.46 cents to $1.4685 a gallon. Natural gas advanced 19.4 cents to close at $6.378 a million British thermal units.

On the New York Board of Trade, March Arabica coffee futures finished 0.35 cent lower at $1.2010 a pound. March futures for raw sugar in foreign ports gained 0.07 cent to end at 11.16 cents a pound.