Europe Declines on Banks, Telecoms

Ivaylo
30 Jan, 2007
New York City

European sock markets declined on Tuesday as losses in the heavily-weighted banking, resources and telecommunications sectors countered gains for airlines and luxury goods. Airline stocks were higher as investors bought into the sector supported by lower oil prices and lack of interest in shares of Alitalia. In early trade, the FTSE 100 in London shed 0.3%, Frankfurt Xetra Dax was little changed, and the CAC 40 in Paris fell 0.2%.

[R]6:30AM Europe was lower on Tuesday on losses in banks and telecoms.[/R]
European markets declined on Tuesday. In early trade, the FTSE 100 in London shed 0.3% to 6,2238, Frankfurt Xetra Dax was little changed at 6,724.37, and the CAC 40 in Paris fell 0.2% to 5,609.54.

Advancers

Air France-KLM, which has cross-shareholdings with Alitalia, gained 3.6% after it said the conditions were not right for a bid. Lufthansa, which on Monday was upgraded by JPMorgan, gained 1.4%, and budget carrier Ryanair added 1.4%. Alitalia jumped 3.3% after receiving 11 expressions of interest. The deadline for first-round offers ended yesterday.

Decliners

The worst performing sectors were basic resources like oil groups and mining stocks as prices fell on commodity markets. Norway Statoil fell 1.2 %, while Austrian OMV lost 0.5% and Italian Eni lost 0.4%. London-listed mining stocks added to the losses as metals prices fell. Kazakhmys lost 2.4%. Steelmakers were also lower, with French steel pipe maker Vallourec off 1.2%, and German ThyssenKrupp down 0.6%.

Oil and gold

Crude oil for March delivery rose 40 cents, or 0.7%, to $54.41 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The contract traded at $54.27 in early trade in London. Brent crude for March gained 47 cents, or 0.9%, to $54.15 a barrel in electronic trading on the ICE Futures exchange and last traded at $53.98 in London.

Gold for immediate delivery in London fell $2.40, or 0.4%, to $641.30 an ounce, and traded $642.50 in early trade.

Currencies

The 13-nation euro rose slightly against the U.S. dollar Tuesday ahead of a meeting of the U.S. Federal Reserve that could set the tone for future interest rate hikes. In morning European trading, the euro bought $1.2960, compared with $1.2956 late Monday in New York. The British pound rose to $1.9675 from $1.9595, while the dollar fell to 121.92 Japanese yen from 121.94 yen.

[R]5:00AM Precious metals declined on Monday on technical selling.[/R]
The most-active March copper lost 9.5 cents to end at $2.5420 per pound and the most-active February gold ended down $1.50 at $643.20 an ounce. March silver shed 12.5 cents to settle at $13.25 an ounce. April platinum finished $6.80 lower at $1,174.70 an ounce while March palladium declined $6 to close at $344.95 an ounce.

The front-month March crude oil contract lost $1.41 to end at $54.01 a barrel. February heating oil declined 4.25 cents to end at $1.5489 a gallon. Front-month gasoline settled down 4.24 cents at $1.441 a gallon and February natural gas dropped 25.8 cents to close at $6.917 per million British thermal units.

On the New York Board of Trade, March Arabica coffee futures gained 0.30 cent to settle at $1.1660 a pound, with May up 0.30 cent at $1.1980. Futures on raw sugar in foreign ports for March finished 0.13 cents lower at 10.59 cents a pound, with May off 0.12 cent at 10.80 cents.