Europe Trades Flat

Ivaylo
31 Jan, 2007
New York City

Tata Steel won the battle for Corus and that news buoyed the metal sector, but European markets remained flat on Wednesday as Commerzbank sank and weighed on the stocks. Banco diPopolare di Verona e Novara advanced on upgrade. Novo Nodisk, the Danish pharmaceutical company, bucked the downward trend in pharma stocks and advanced. By mid morning, the FTSE 100 in London lost 0.1%, Frankfurt Xetra Dax shed 0.3% to and the CAC 40 in Paris slid 0.4%.

[R]6:30AM European markets are flat Wednesday, as financials pull stocks down.[/R]
European markets egded lower on Wednesday. By mid morning, the FTSE 100 in London lost 0.1% to 6,238.0, Frankfurt Xetra Dax shed 0.3% to 6,769.70 and the CAC 40 in Paris slid 0.4% to 5,620.6.

Advancers

Amsterdam-listed Corus gained 6.6% as Tata Steel of India won the bidding war with CSN of Brasil. Expectations for consolidation in the sector are still high as the offer by Tata for Corus followed on closely from Mittal Steel buying Arcelor. Shares in Arcelor Mittal were up 1.5%, German ThyssenKrupp added 1.3%, Salzgitter rose 1.8% and Finnish stainless steel group Outokumpu gained 0.8%.

Banco Popolare di Verona e Novara advanced, despite weakness in the banking sector, after HSBC maintained its overweight position and raised its price target. Last week, the Bank of Italy cleared the proposed merger of BPVN with Banca Popolare Italiana. BPVN shares gained 1.3%, while BPI added 0.9%. Novo Nordisk, the Danish drugmaker, gained after reporting a 13% rise in full-year operating profits. The shares gained 0.9%.

Decliners

Financial stocks declined after several sessions of gains. Commerzbank of Germany fell 0.4% as its Polish division BRE Bank decided not to pay an annual dividend despite posting net income had more than doubled in 2006.

Infineon fell 2.4% after Goldman Sachs removed the German chipmaker from its conviction buy list after the stock recent strong performance. Carmakers were also lower, with Porsche off 1.7% and Peugeot down 2.5%.

Oil and gold

Oil prices declined Wednesday as the market awaited the weekly U.S. inventories report. Crude oil for March delivery fell 39 cents to $56.90 in electronic trading on the New York Mercantile Exchange. Brent crude for March delivery dipped 36 cents to $56.03 a barrel on the ICE Futures exchange in London. Gold fell in London as the dollar gained against the euro. Gold for immediate delivery in London traded at $645.60 an ounce in early trade, down 0.3%.

Currencies

The US dollar traded at $1.2934 against the euro in early trade in London, from $1.2970 late yesterday in New York. The dollar was trading at 121.50 yen, down slightly from 121.62 yen late Tuesday in New York.

[R]5:00AM Gold and silver advanced Tuesday amid thin trading, copper also gained.[/R]
The most-active February gold advanced $1.00 to end at $644.20 a troy ounce at the New York Mercantile Exchange. March silver ended 12.5 cents higher at $13.375. April platinum finished $1,180.60 an ounce, up $5.90 and March palladium closed $341.25 an ounce, down $3.70. March copper settled up 1.95 cent at $2.5615 per pound.

The front-month March crude oil advanced $2.96 to end at $56.97 a barrel. February heating oil gained 8.91 cents to close at $1.6380 a gallon, and February gasoline settled up 8.03 cents at $1.5213 a gallon while February natural gas gained 80.3 cents close at $7.740 per million British thermal units.

On the New York Board of Trade, March Arabica coffee futures declined 0.05 cent to finish at $1.1655 a pound. Futures on raw sugar in foreign ports for March lost 0.04 cent to 10.55 cents a pound, with May off 0.05 cent at 10.75 cents.