Europe Extends Gains on M&A

Ivaylo
12 Mar, 2007
New York City

European stocks posted early gains Monday on mergers-and-acquisition activity, led by Dutch drug and chemicals group Akzo Nobel and U.K. pharmacy chain Alliance Boots. Alliance Boots jumped to an eight-year high. National benchmarks rose in all of the 18 western European markets except for Spain. The FTSE 100 index added 0.4%, the French CAC 40 index rose 0.4% and the German DAX 30 index gained 0.5%.

[R]6:30AM European markets advanced on Monday on bid activities.[/R]
European stocks were higher on Monday. The FTSE 100 index added 0.4% at 6,271.20, the French CAC 40 index rose 0.4% at 5,558.67 and the German DAX 30 index gained 0.5% at 6,747.85.

Advancers

Akzo Nobel surged 15.7% after it agreed to sell its Organon BioSciences unit to Schering-Plough Corp for 11 billion euros, or $14.4 billion in cash. Shares of U.K. pharmacy chain Alliance Boots rose 6.1%, adding to the strong gains on Friday, after private equity company Kohlberg Kravis offered 1,000 pence a share for the group.

U.K. supermarket operator J Sainsbury which had been linked to a private equity bid, shed 1.9% as investors speculated that KKR would not be able to afford to buy it as well. Smith & Nephew advanced 2.9% after it has agreed to buy Plus Orthopedics, a privately held Swiss firm, for $889 million in a deal that will make it the number four player in the global orthopedic reconstruction market

In mining stocks, Rio Tinto Group added 0.7%. The world third-largest mining company, said Chinese demand for metals will likely rise, underpinning high prices for commodities this year. BHP Billiton, the world largest mining company, gained 1.4%. Xstrata Plc, the world fourth- largest copper producer, added 0.9%.

Decliners

Total, Europe largest refiner, dropped 0.7%. The company completed drilling an exploration well in the Norwegian Sea without finding oil or natural gas, the Norwegian Petroleum Directorate said today. Eni SpA, Italy largest natural-gas company, fell 0.7%. OMV AG, Central Europe biggest oil company, slid 0.5%. E.ON AG, whose 41 billion-euro bid for Endesa SA ends March 29, lost 0.8%, leading utility shares lower.

Oil and metals

Crude oil for April delivery shed 78 cents, or 1.3%, to $59.27 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

Gold was little changed as a gain in the value of the U.S. dollar against the Japanese yen reduced the appeal of the precious metal as an alternative investment. Gold for immediate delivery was at $652.75.

Silver also fell. Silver for immediate delivery fell 1 cents, or 0.1%, to $12.93 an ounce. Platinum declined $7.50, or 0.6 %, to $1,198 an ounce.

Currencies

The euro gained the most against the dollar in three weeks as European Central Bank council member Klaus Liebscher signaled interest rates will increase further. Against the dollar, the euro traded at $1.3173 in early trade in London, from $1.3116 late in New York March 9. The currency was at 155.60 versus the yen, from 155.19. The pound rose to $1.9404 against the dollar, from $1.9320 and 229.10 yen from 228.62 in early trade in London. The currency was also little changed at 67.87 pence versus the euro.

[R]5:00AM Gold and silver futures ended lower Friday on stronger dollar.[/R]
April gold dropped $3.50 to end at $652 a troy ounce on the New York Mercantile Exchange, while May silver shed 15 cents to $12.97 an ounce. The most-active May copper contract dipped 4.95 cents to settle at $2.7840 per pound. April platinum fell $10.80 to $1,203.70 an ounce, and June palladium posted a gain of $3.35 to $356.40.

The April crude oil contract declined $1.59 to finish at $60.05 a barrel, after going up to $61.83. April heating oil settled down 4.91 cents at $1.7122 a gallon. April gasoline lost 2.40 cents to close at $1.9021 a gallon. April natural gas settled down 15.6 cents at $7.083 a million British thermal units.

On the New York Board of Trade, May Arabica coffee futures ended up 0.10 cent at $1.1250 a pound, with July up 0.05 cent at $1.1535. May futures on raw sugar in foreign ports settled down 0.07 cent at 10.52 cents a pound, with July off 0.13 cents at 10.38 cents.