Europe Higher on Banks

Ivaylo
01 Feb, 2007
New York City

Financial, energy and drugs sectors led gainers on European markets after the strong close on US stocks overnight following the Federal Reserve decision to leave US interest rates unchanged. In Europe, financial stocks were in focus with results from Deutsche Bank and French insurer Axa. By mid morning, the FTSE 100 in London climbed 1.1%, Frankfurt Xetra Dax added 0.9%, and the CAC 40 in Paris gained 1.1%.

[R]7:00AM European markets advanced Thursday supported by financial shares.[/R]
European markets were higher on Thursday. By mid morning, the FTSE 100 in London climbed 1.1% to 6,269.3, Frankfurt Xetra Dax added 0.9% to 6,846.57, and the CAC 40 in Paris gained 1.1% to 5,671.68.

Advancers

Deutsche Bank, the biggest bank in Germany, posted a forecast-topping record full-year net profit of 6 billion euros on strong growth in investment banking and trading income. The stock rose just 0.1%. UBS, the Swiss investment bank, rose 1.2%, while Société Générale of France and BNP Paribas, whose price targets were upgraded on Wednesday by Oddo Securities, gained 1.4% and 1.6% respectively. Axa, the second-biggest insurer in Europe, gained 2.7% after reporting that full-year sales rose by nearly 10%.

Oil stocks were led by Royal Dutch Shell, which rose 2.1% in Amsterdam after reporting a forecast-topping 2.6% rise in underlying Q4 profits. European peers were buoyed by the news and Total of France rose 1.5%, while Austrian OMV added 2.3%.

Novo Nordisk, the Danish drugs company which posted strong earnings in the previous session, rose 2.8%. Novartis, the Swiss drugmaker, gained 1.1% after JPMorgan upgraded the stock from neutral to overweight and raised its price target.

Decliners

Henkel, the German household goods group, fell 3.9% after its 7.3 % rise in Q4 earnings fell short of expectations, while improvements in profit margins also disappointed.

Oil and metals

The front-month March crude oil contract on the New York Mercantile Exchange rose $1.17, or 2.1%, to $58.14 a barrel, the highest settlement of crude futures since Jan. 3. Gold for immediate delivery was little changed at $653.40 an ounce in early trade in London. Silver rose 4 cents to $13.565 an ounce today, palladium gained $1 to $339.50 an ounce and platinum advanced $3 to $1,183 an ounce.

Currencies

The dollar advanced against the euro, stopping a three-day drop, before a U.S. report expected to show manufacturing grew in January at the fastest pace in four months. The currency traded at $1.3010 versus the euro in early trade. in London, from $1.3032 late yesterday in New York. The dollar traded at 120.59 yen, from 120.70 yen. The pound was at 66.21 pence per euro in London from 66.31 pence late yesterday. It was also at $1.9645 versus the dollar from $1.9655.

[R]5:00AM Gold and silver futures gained Wednesday on weaker dollar, fund buying.[/R]
April gold gained $7.70 to end at $657.90 a troy ounce on the New York Mercantile Exchange. March silver advanced 19.5 cents to $13.57, and April platinum settled up $1.70 at $1,182.30 an ounce. March palladium declined 70 cents to close at $340.55 an ounce. March copper ended up 3.3 cents at $2.5945 a pound.

The front-month March crude oil contract closed up $1.17 at $58.14 a barrel. February heating oil settled up 1.66 cents at $1.6546 a gallon. Front-month February gasoline declined 2.04 cents to finish at $1.5009 a gallon and March natural gas also lost 7.3 cents to end at $7.667 per million British thermal units.

On the New York Board of Trade, March Arabica coffee futures settled 1.10 cents higher at $1.1765 a pound, with May up 1.15 cents at $1.2090. Futures on raw sugar in foreign ports for March gained 0.05 cent to end at 10.60 cents a pound, with May up 0.06 cent at 10.81 cents.