Europe Slips on Selling Pressure

Ivaylo
13 Mar, 2007
New York City

European shares edged lower Tuesday on broad but mild selling pressure as traders looked for a new catalyst after a recent burst of mergers-and-acquisitions activity, though truck maker Man reported strong gains on hopes that it will be part of the M&A wave. European stocks fell also on speculation that rising loan defaults in the U.S. will hurt earnings at the regional banks. Broadly, the German DAX 30 index fell 0.4%, the French CAC 40 dipped 0.2% and the U.K. FTSE 100 lost 0.4%.

[R]7:00AM European markets were lower in early trade Tuesday on selling pressure.[/R]
European markets were lower on Tuesday. The German DAX 30 index fell 0.4% at 6,690.70, the French CAC 40 dipped 0.2% at 5,483.83 and the U.K. FTSE 100 lost 0.4% at 6,208.00.

Advancers

Man AG advanced 2.3% after it was upgraded to buy from neutral at UBS, with the broker also raising its price target. Antofagasta also added, up 0.6% in London after reporting an 87% jump in net profit to $1.35 billion due to record copper prices and higher-than-expected production for the year.

Altadis SA gained 2.9% after it was reported that Imperial Tobacco contacted the Spanish cigarette maker to see if it would be interested in a merger.

Decliners

U.K. brewer SABMiller fell 3.5%, leading decliners on the benchmark index, after the company announced operating profit will be hurt by around $80 million in the financial year that is going to start on April 1. Swisscom lost 1.8% after posting a 21% drop in 2006 net income to $1.3 billion as revenue fell 0.8%. Swisscom on Monday offered to buy Italian rival FastWeb for around $4.9 billion.

Michelin shares lost 1.4% after announcing it plans to issue between 610 million and 700 million euros of 10-year, zero-coupon convertible bonds. Michelin stated it is trying to take advantage of favorable market conditions and diversify its sources of funding.

Oil and gold

Oil prices bounced back Tuesday after a big decline a day earlier as traders reassessed the outlook for energy demand and supplies. Light, sweet crude for April delivery on the New York Mercantile Exchange gained 53 cents to $59.44 a barrel by noon in Europe. Brent crude rose 60 cents to $61.34 a barrel Tuesday on London''s ICE futures exchange. Gold traded at $649.60 an ounce on Tuesday, down $3.50 an ounce from the close of $653.10 on Monday.

Currencies

The euro edged lower against the U.S. dollar on Tuesday. The euro bought $1.3160 in morning European trading, down from $1.3187 in New York late Monday. The British pound slid to $1.9285 from $1.9318. The dollar was lower against the Japanese yen, however, slipping to 117.41 from 117.61.

[R]5:00AM Gold declinedon Monday, while silver and copper advanced.[/R]
April gold shed $1.70 to $650.30 a troy ounce on the New York Mercantile Exchange. May silver gained 11.5 cents to end at $13.085. April platinum settled up $10.10 at $1,213.80 an ounce, while June palladium lost 40 cents at $356 an ounce. The most active May copper contract ended up 6.50 cents at $2.8490 per pound.

The April crude oil declined $1.14 to $58.91 a barrel after hitting an intraday low of $58.60 a barrel. April heating oil shed 2.99 cents to $1.6823 a gallon, while April gasoline advanced 0.84 cent to close at $1.9105 a gallon after rallying to $1.9300 a gallon, more than six cents off its intraday lows. April natural gas dipped 17.1 cents to finish at $6.912 per million British thermal units.

On the New York Board of Trade, Arabica coffee futures finished lower as the May contract closed 0.70 cent down at $1.1180 a pound. Futures on raw sugar in foreign ports ended down 0.16 cent at 10.36 cents a pound.