Europe Flat on Bank Weakness

Ivaylo
23 Feb, 2007
New York City

European equity markets turned flat by mid morning on Friday, as support from resource stocks was undermined by profit taking in the financial sectors. The technology sector was led higher by Alcatel-Lucent, which won a suit against Microsoft. Deutsche B

[R]6:30AM Europe was flat on Friday on weakness in banking stocks.[/R]
European markets were trading flat on Friday. By mid-morning, Frankfurt Xetra Dax added 0.1% to 6,979.43, the CAC 40 in Paris fell 0.1% to 5,699.86 and London FTSE 100 shed 0.2% to 6,365.9.

Advancers

Alcatel-Lucent, telecommunications equipment group, jumped 2.1% after a US court ruled in its favour against software company Microsoft over an MP3 patent infringement. Microsoft was ordered to pay Alcatel-Lucent $1.52 billion in damages. Deutsche Börse was in favor after Atticus Capital, the New York-based hedge fund, raised its stake in the German stock exchange operator from 7% to 11.7% and encouraged the company to spin off or sell its Clearstream division. Its shares gained 1.1%.

Oil groups advanced after crude prices rose above $61 a barrel on the New York Mercantile Exchange. Statoil, the Norwegian group, was up 1.6 %, while Neste Oil, which was raised from sell to neutral by Goldman Sachs, gained 1.4%.

Fresenius Medical Care, the dialysis provider, also gained 1.7% after its stronger-than-expected results, released in the previous session, prompted Goldman Sachs to raise its price target.

Decliners

Financial stocks suffered intense profit taking after some strong results in recent sessions. Greek EFG Eurobank fell 1.5% after Deutsche Bank said it was placing 7.5 million shares, or 2% of the share capital, at no lower than 25 euro a share. Lafarge, the largest cement group in the world, gave up earlier gains as investors took profits after the company reported a 25% rise in full-year net profit and issued an upbeat outlook statement. The shares slipped 0.2%.

Oil and gold

Oil trading was slow Friday as the market adjusted to a surprising drop in U.S. gasoline and heating oil inventories. Light, sweet crude for April delivery edged just 1 cent higher to $60.96 in light electronic trading on the New York Mercantile Exchange. Gold opened Friday at a bid price of $675.70 a troy ounce, down from $677.20 late Thursday.

Currencies

The dollar was trading at 121.46 yen Friday, down from 121.60 yen late Thursday in New York. The euro slipped against the dollar to $1.3124 from $1.3125.

[R]5:00AM Corn rallies to ten-year high Thursday, gold declines.[/R]
March corn settled 8.25 cents higher at $4.3450 per bushel, and May corn jumped 8.50 cents to $4.4750. Soybean futures climbed to new contract highs but pared gains amid late profit-taking. March soybeans closed up 2.50 cents at $7.8375, and May soybeans ended 2.50 cents higher at $8.0050. The March copper contract advanced 11.15 cents to settle at $2.7660 per pound. April gold declined $1 to $683 a troy ounce, while March silver also finished 2.3 cents lower at $14.25 an ounce. March palladium peaked at $351.80, its strongest level since Jan. 29, before ending up $6.55 at $350.70 an ounce. April platinum settled down $3.20 at $1,230 an ounce.

The front-month April crude oil contract closed up 88 cents at $60.95 a barrel. March heating oil settled up 4.34 cents at $1.7250 a gallon. March natural gas settled up 8.1 cents at $7.727 a million British thermal units.

On the New York Board of Trade, Arabica coffee futures surged to two-week highs as shorts hurried to cover in a broad-based commodity surge. The March contract closed up 3.75 cents at $1.1890 a pound, with active May up 3.70 cents at $1.2015. Futures on raw sugar in foreign ports for March gained 0.39 cent to settle at 11.10 cents a pound, with May up 0.29 cent at 10.68 cents.