Europe Higher, Deutsche Telekom Plunges

Ivaylo
29 Jan, 2007
New York City

European stock markets opened higher on Monday, but losses for telecommunications stocks impacted equities following the second profit warning from Deutsche Telekom in six months. Deutsche Telekom announced on Sunday that competition in Germany and challenging currency conditions had forced it to reconsider its 2007 forecasts. Airline stocks provided some respite. By mid morning, the FTSE 100 in London inched 0.1% higher, Frankfurt Xetra Dax gained 0.2%, and the CAC 40 in Paris added 0.4%.

[R]6:30 AM European markets edged higher on Monday despite warning from DT.[/R]
European markets inched higher on Monday. By mid morning, the FTSE 100 in London inched 0.1% higher to 6,231.2, Frankfurt Xetra Dax gained 0.2% to 6,706.1, and the CAC 40 in Paris added 0.4% to 5,606.54.

Advancers

Airline stocks advanced as German airline Lufthansa gained 1.6%. Air France-KLM shares were up 1.2%, Ryanair gained 0.1% and British Airways climbed 1.2%, despite caution ahead of expected strikes by cabin crew this week. Infineon, the German chipmaker, climbed 2.6% after it reported better-than-expected results for its fiscal Q1.

Fiat gained 1.6% after a price target upgrade from JPMorgan. Financial services stocks added weight to the overall gains in the market. Danske Bank gained 2.1%, BNP Paribas added 1.2%, and Portuguese largest lender Millennium BCP rose 1.4%.

Decliners

Deutsche Telekom said it now anticipated core profit for this year to come in at 19 billion euros rather than the previous estimate of between 19.7 billion euros - 20.2 billion euros. The shares fell 5.9%. Among other telecom stocks, Dutch group KPN fell 2.4%, France Telecom lost 2%, Belgacom shed 1.5% and BT Group slid 1.3%.

Oil and gold

Light, sweet crude for March delivery gained 31 cents to $55.73 a barrel in electronic trading on the New York Mercantile Exchange. March Brent crude on the ICE Futures exchange in London rose 36 cents to $55.65 a barrel. Gold traded in London at $643.40 per troy ounce, down from $645.95 late Friday.

Currencies

The dollar was mostly higher against other major currencies in European trading Monday morning. The euro traded at $1.2916, up from $1.2910 late Friday. The British pound was quoted at $1.9570, down from $1.9588. The dollar bought 121.89 Japanese yen, up from 121.58.

[R]5:00 AM Copper and precious metals slipped Friday on dollar strength.[/R]
The most active March copper ended down 1.75 cents at $2.637 per pound while February gold also dipped $3.40 to settle at $644.70 a troy ounce. March silver finished 11.5 cents lower to $13.375 an ounce. April platinum closed $6.50 lower at $1,181.50 an ounce while March palladium settled $4.50 lower at $350.95 an ounce.

The March crude oil contract surged to an intraday high of $55.50 a barrel before finishing up $1.19 at $55.42 a barrel. February heating oil closed up 4.23 cents as well, at $1.5914 a gallon. February gasoline ended 3.93 cents higher at $1.4834 a gallon and February natural gas ended up 27 cents at $7.175 per million British thermal units.

On the New York Board of Trade, March Arabica coffee futures finished up 0.30 cent at $1.1630 a pound, while futures on raw sugar in foreign ports for March finished up 0.03 cent at 10.72 cents a pound.