Europe Declines on Commodities, Banks

Ivaylo
16 Mar, 2001
New York City

European shares traded lower early Friday with mining and metals stocks tracking a decline ahead of the release of key U.S. economic data on inflation and consumer confidence. BP and Royal Dutch Shell led a slide by energy companies. HSBC Holdings fell to the lowest since 2005 on concerns a U.S. mortgage crisis will spread to the rest of the financial industry. Broadly the German DAX 30 index fell 0.7%, the French CAC 40 index lost 0.7% and the U.K. FTSE 100 index gave up 0.6%.

[R]7:00AM European stocks declined Friday ahead of key U.S. economic data.[/R]
European markets were lower on Friday. In morning trade, the German DAX 30 index fell 0.7% at 6,541.86, the French CAC 40 index lost 0.7% at 5,354.86 and the U.K. FTSE 100 index gave up 0.6% at 6,096.30.

Advancers

French electronics group Thomson added 3.1% after it was upgraded to buy from neutral at Merrill Lynch, which said the core business of the group is finally coming to the fore. Unilever added to the previous session gains. Its shares advanced 2.3% in London, after an investor presentation earlier in the week got a favorable response.

Among mid-caps, France Zodiac rose 3.6% after it reported an 8.5% rise in revenue to 1.18 billion euros for the six-months to Feb. 28, as positive trends in the civil aviation markets helped its aerosafety systems and cabin interiors units.

Decliners

Of oil stocks, BP, the second biggest oil company in the region, dropped 1.1%. Shell, Europe biggest oil company, lost 1.2%. OMV AG, Central Europe biggest oil company, retreated 2.8%.

Commodity stocks were weak. Arcelor Mittal lost 1.1% in Paris as U.K.-listed miners Anglo-American and Antofagasta both lost more than 1%. BHP Billiton, the world biggest mining company, dropped 0.4%.

Banks also sank. HSBC dropped 1.1%. Pretax profit in North America plunged 87% in the second half, forcing Chief Executive Officer Michael Geoghegan to fire senior managers and tighten lending rules. Royal Bank of Scotland Group., which owns Citizens Financial Group in the U.S., declined 1.5%.

Oil and gold

Crude oil rose on expectations among some traders and brokers that demand for fuel will grow. Crude oil for April delivery rose 24 cents at $57.79 a barrel in electronic trading on the New York Mercantile Exchange in early trade in London. Brent crude for May settlement rose 10 cents to $60.78 a barrel in electronic trading on the ICE Futures exchange in London. Gold opened Friday at a bid price of $646.70 a troy ounce, down from $647.75 late Thursday.
Currencies
The euro climbed above $1.33 on Friday, with the U.S. dollar apparently pushed down by comments from former Federal Reserve Chairman Alan Greenspan on the economic implications of the troubles plaguing lenders of risky mortgages. The euro bought $1.3307 in morning European trading, up from $1.3237 in New York late Thursday. The British pound rose to $1.9424 from $1.9364. The dollar also lost ground against the Japanese yen, sliding to 116.84 yen from 117.62 yen.

[R]5:00AM Gold and silver advanced on Thursday on global market stability.[/R]
April gold gained $4.60 to $647.10 a troy ounce on the New York Mercantile Exchange and May silver also advanced 24.5 cents to $13.075. April platinum ended up $14.70 at $1,215.70 an ounce while June palladium declined $1.80 to $351.70 an ounce. The most-active May copper contract added 16.20 cents to settle at $2.9880 per pound.

April crude oil finished down 61 cents at $57.55 a barrel, while April heating oil settled down 2.05 cents at $1.6885 a gallon. April gasoline ended down 4.67 cents at $1.8816 a gallon, as well as April natural gas which finished down 12.4 cents at $6.959 per million British thermal units.

On the New York Board of Trade, May Arabica coffee futures settled up 0.70 cent at $1.1055 a pound, with July up 0.65 cent at $1.1340. Futures on raw sugar in foreign ports dropped but pared a sell-off to five-week lows. May settled down 0.18 cent at 10.23 cents a pound, with July off 0.15 cent at 10.13 cents.