Modest Recovery in Europe

Ivaylo
01 Mar, 2007
New York City

European stock markets staged a slight recovery on Thursday after two days of sharp declines, led by a recovery in financial stocks, particularly those hardest hit during the market correction. European markets were also supported by the partial recovery on US market overnight. By mid-day, the main stock exchanges in Europe were higher. Frankfurt Xetra Dax was up 0.5%, the CAC 40 in Paris was 0.5% higher and London FTSE climbed 0.8%.

[R]6:30AM Europe rebounds Thursday as financial stocks gain ground.[/R]
European markets were modestly higher on Thursday. Frankfurt Xetra Dax was up 0.5% to 6,747.46, the CAC 40 in Paris was 0.5% higher at 5,542.31 and London FTSE climbed 0.8% to 6,222.7.

Advancers

Swiss Re advanced 4.5% after the reinsurer reported full-year net profit increased twice on lower claims and the acquisition of the reinsurance division of General Electric. Munich Re, whose in-line results were overlooked in the sell-off the previous session, gained 0.8% after a price target upgrade by Lehman Brothers.

A number of emerging markets mounted rallies, helping lift the financial stocks with the most exposure to them. Raiffeisen International and Erste Bank, the Austrian rivals, both of which have operations across central and eastern Europe, gained 3.6% and 3.4% respectively.

Recent pledges on renewable energy sources helped lift producers of solar energy equipment. Renewable Energy Corp, the Norwegian maker of solar panels, gained 4.4%, while German rival Q-Cells gained 2.8%. Acciona, the Spanish builder and investor in wind energy, gained 2.2%. Eon, the German group whose 41 billion euros bid for Endesa now looks to be in some doubt, edged 0.4% higher.

Decliners

Deutsche Telekom declined 2.3% after posting a 43% drop in full-year net profit and reducing forecasts for core earnings this year. The company announced it would help drive future growth through foreign acquisitions, possibly part funded by the sale of non-core European assets.

Oil and gold

Oil prices declined slightly Thursday as traders responded to gains a day earlier caused by a report showing dropping U.S. crude inventories. Crude oil for April delivery fell 11 cents to $61.68 a barrel in electronic trading on the New York Mercantile Exchange. Gold opened Thursday at a bid price of $668.80 a troy ounce, down from $680.60 late Wednesday.

Currencies

The euro was stronger against the U.S. dollar on Thursday as some markets in parts of the world appeared to shake off a slump earlier this week. The euro bought $1.3233, compared with the $1.3216 it bought in New York late Wednesday. The British pound edged up Thursday to $1.9605 from $1.9594. The dollar rose to 118.39 Japanese yen from 118.12 yen.

[R]5:30AM Gold and silver decline on Wednesday, while corn gains.[/R]
March corn ended 14.25 cents higher at $4.2525 per bushel, May corn settled 11.25 cents higher at $4.3550, and December finished 10.50 cents higher at $4.20. May soybeans ended 8.75 cents higher at $7.8750 per bushel. May wheat gained 4.50 cents to $4.88 per bushel.

April gold declined $14.70 to $672.50 a troy ounce on the New York Mercantile Exchange. May silver shed 45.5 cents to $14.235. April platinum settled up $3.10 at $1,256.40 an ounce, while June palladium closed steady at $356.60. The May copper contract lost 7.30 cents to close at $2.7520 per pound.

The front-month April crude oil contract advanced 33 cents to finish at $61.79 a barrel. Front month March gasoline gained 3.15 cents to end at $1.8476 a gallon and front month March heating oil settled up 0.11 cent at $1.7804 a gallon. April natural gas bucked the trend and finished 23.3 cents lower at $7.300 a million British thermal units.

On the New York Board of Trade, March Arabica coffee futures settled up 0.40 cent at $1.1770 a pound, with May up 0.20 cent at $1.1850. Futures on raw sugar in foreign ports for March settled down 0.14 cent at 11.31 cents a pound, with May down 0.24 cent at 10.56 cents.