Oil and Banks Boost Europe

Ivaylo
24 Jan, 2007
New York City

European stocks were higher in early trade on Wednesday as rising oil prices lifted energy stocks, while banking sector gains were led by HVB Group after majority shareholder Unicredit said it planned to buy out minority investors. The market shrugged off the declines from technology companies SAP and STMicroelectronics. In early trade, FTSE 100 in London climbed 0.6%, Frankfurt Xetra Dax added 0.3%, and the CAC 40 in Paris gained 0.5%.

[R]6:30 AM Europe was higher Wednesday on oil and banking stocks upmove.[/R]
European markets gained on Wednesday. In early trade, FTSE 100 in London climbed 0.6% to 6,262.4, Frankfurt Xetra Dax added 0.3% to 6,696.07, and the CAC 40 in Paris gained 0.5% to 5,605.1.

Advancers

Shares in HVB gained 5.8% and Bank Austria added 5.5 % after Unicredit, which owns 95 % in both businesses, announced it was to buy out the remaining shares in the two banks. Italian banks were higher following upgrades to the sector late on Tuesday by Morgan Stanley. Banca Monte dei Paschi di Siena edged 0.3% higher, while Capitalia edged up 0.5% after the broker raised its rating from underweight to equal weight.

Crude prices surged overnight after the US announced it would double the capacity of its emergency reserves stockpile. European oil producers all benefited. Total of France gained 1%, Cepsa of Spain notched up 1.9% and Statoil of Norway rose 2%. BP advanced 1.2% and miner Vedanta Resources gained 2%.

Decliners

SAP shares declined 5.4% after it announced that its 2007 operating margins would fall. The company posted Q4 profit and sales figures matching its warning from a few weeks ago, with net income up 29% and revenue up 7%.

Oil and gold

Crude oil for March delivery dropped 59 cents, or 1.1%, to $54.45 a barrel in after-hours electronic trading on the New York Mercantile Exchange, as a government report today may show commercial stockpiles advanced for a second week. It traded at $54.50 in early trade in London. Gold traded in London at $643.00 per troy ounce, down from $645.12 late Tuesday.

Currencies

The dollar was mostly higher against other major currencies in European trading Wednesday morning. The euro was at $1.3002, down from $1.3021 late Tuesday. The British pound was quoted at $1.9760, down from $1.9825. The dollar bought 121.44 Japanese yen, down from 121.64.

[R]5:00 AM Gold surges Tuesday on skidding dollar and Bolovian intentions.[/R]
February gold ended up $11.80 at $645.90 a troy ounce on the New York Mercantile Exchange and March silver also closed up 26 cents at $13.26 an ounce. The most active March copper advanced 5 cents to settle at $2.5795 per pound. April platinum was up $18.10 at $1,183.20 an ounce, while March palladium traded to its highest level in more than four months at $353.50 and finished at $350.35, up $3.65 an ounce.

The March crude oil contract surged $2.57 to a high of $55.15 a barrel before pulling back. The contract ended $2.46 higher at $55.04 a barrel. February gasoline added 7.19 cents to finish at $1.4473 a gallon, while February heating oil settled up 6.79 cents at $1.5763 a gallon. February natural gas gained 27.8 cents to end at $7.597 per million British thermal units.

On the New York Board of Trade, the March Arabica coffee futures declined 1.70 cents at to close at $1.1565 a pound, while the May futures fell 1.70 cents to $1.1885. Futures on raw sugar in foreign ports for March finished 0.14 cent lower at 10.79 cents a pound.