Tech Shares Boost Europe

Ivaylo
17 Jan, 2007
New York City

European shares edged higher on Wednesday morning as investors welcomed updates from brewer SABMiller, chip equipment maker ASML Holding and mobile phone maker Sony Ericsson. Rio Tinto Group led a slide by commodity producers after the mining company said iron ore production fell from a record. The U.K. FTSE 100 index rose 0.1%, the German DAX Xetra 30 index increased 0.2% and the French CAC-40 index advanced 0.1%.

[R]6:30 AM European stocks were higher Wednesday on strong tech sector.[/R]
European markets were higher on Wednesday. By mid-morning, the U.K. FTSE 100 index rose 0.1% at 6,221.10, the German DAX Xetra 30 index increased 0.2% at 6,728.33 and the French CAC-40 index advanced 0.1% at 5,596.90.

Advancers

ASML Holding shares rallied 4.9% after announcing that its fourth-quarter net income jumped to 205.5 million euros, or $265.2 million from 51.6 million euros a year ago, net sales rose 95% to 1.07 billion euros and that it intends to start another share buyback program.

Ericsson rose 1.7% after its Sony Ericsson mobile-phone joint venture with Japanese company Sony posted a fourth-quarter profit of 447 million euros, or $578 million from 144 million euros a year earlier, boosted by the sales of Walkman phones.

SABMiller advanced 3.5% after it said that its financial performance was in line with its expectations despite adverse price recovery.

Decliners

Miners fell on weaker commodity prices. Rio Tinto fell 1.5%. Output of iron ore, second- highest profit contributor of the company, dropped to 35.1 million metric tons in the three months ended Dec. 31 from 35.7 million tons in the previous quarter. Anglo American Plc, the world-second biggest mining company, dropped 1.5% on a decline in copper.

Shares in EADS slid 2.5% after it said that its Airbus subsidiary is likely to post a loss before interest and tax in 2006 after delays to its flagship A380 program resulted in increased costs.

Oil futures and commodity prices

Oil prices recovered Wednesday after plunging to 19-month lows after the oil minister of Saudi Arabia said further OPEC productions cuts were not necessary right now. Light sweet crude oil futures for February delivery rose 38 cents to $51.59 in electronic trading on the New York Mercantile Exchange. February Brent crude on London ICE futures exchange increased 40 cents to $52.02 a barrel.

Gold for immediate delivery fell as much as $1.60, or 0.3%, to $623.20 an ounce and traded at $624.60 in early trading. It settled at $624.80 in New York late yesterday. Copper for delivery in three months on the London Metal Exchange fell $56, or 1%, to trade at $5,659 a ton

Currencies

The euro lost some ground against the U.S. dollar on Wednesday despite lackluster economic reports from the United States. The 13-nation euro bought $1.2921 in morning European trading, compared with $1.2923 late Tuesday, as the dollar shrugged off a report by New York Federal Reserve that its Empire State Manufacturing index dropped to 9.1 in January from 22.2 in December.

The pound was also barely changed against the dollar, buying $1.9642, compared with $1.9626 on Tuesday. The dollar was slightly higher against the Japanese yen, edging up to 120.64 yen from 120.60 on Tuesday as speculation whether the Bank of Japan next interest rate move.

[R]5:00 AM Gold futures decline on Tuesday on stronger dollar, weaker oil.[/R]
Gold for February delivery finished down by $1 at $625.90 an ounce on the New York Mercantile Exchange. March silver closed 25.5 cents lower, or 2%, at $12.625 an ounce, April platinum fell $6.30 to end at $1,145.80 an ounce and March copper futures slipped 2.55 cents to end at $2.5775 a pound. March palladium closed up 90 cents at $335.85 an ounce.

Oil stocks fell Tuesday, with a 3% drop in crude oil prices. Saudi oil minister Ali al-Naimi triggered the slide, telling reporters at an oil conference in India that he sees no need for the Organization of Petroleum Exporting Countries to launch a fresh round of output cuts. The February futures contract closed $1.78 lower at $51.21 a barrel. February gasoline futures closed down 6.27 cents at $1.3693 a gallon and February heating oil closed down 2.33 cents at $1.4803 a gallon. February natural-gas futures gained by 3.7 cents to close at $6.638 per million British thermal units, recovering from a low of $6.46.