U.S. Growth Concerns Press Europe

Ivaylo
28 Mar, 2007
New York City

European markets declined on Wednesday, as downside pressure was felt in most sectors, although oil stocks provided some support as oil prices hit six-month highs. BHP Billiton and SAP AG led declines by mining and technology companies. In early trade, Frankfurt Xetra Dax climbed 0.4%, the CAC 40 in Paris added 0.4% and London FTSE 100 slipped 0.1%.

[R]6:30AM European shares were lower Wednesday on selling pressure.[/R]
European markets declined on Wednesday morning. In early trade, Frankfurt Xetra Dax climbed 0.4 % to 6,829.21, the CAC 40 in Paris added 0.4 % to 5,566.23 and London FTSE 100 slipped 0.1 % to 6,288.5. National benchmarks fell in 16 of the 18 markets in western Europe.

Advancers

Oil groups provided the only substantial support to the market after oil prices spiked briefly above $66 a barrel. Finnish refiner Neste Oil gained 2.3%, France Total rose 1%, while Britain BP added 1% and Royal Dutch Shell, Europe biggest oil company, gained 1.7%.

Decliners

BHP Billiton, the world biggest mining company, dropped 0.8% and Rio Tinto Group slipped 2%. SAP, the world largest maker of business-management software, fell 1.2% and Ericsson AB, the biggest producer of wireless-network equipment, lost 0.8%. Siemens AG, Europe largest engineering company, lost 1.6%.

Airlines were also lower as oil accounts for 30% of airlines costs. Shares of Air France lost 1.3%. British Airways, Europe third-biggest airline, retreated 0.9%. UPM-Kymmene led the Finnish paper and forestry groups lower, down 4.1%, after reports that an early spring in Finland could cause problems accessing raw materials in remote areas.

Oil and gold

Oil gained for a seventh day in New York on concern a dispute over detention of British servicemen by Iran will escalate. Crude oil for May delivery gained as much as $1.53, or 2.4%, to $64.46 a barrel in electronic after-hours trading on the New York Mercantile Exchange. Brent crude for May settlement rose as much as $1.53, or 2.4%, to $66.13 a barrel in electronic trading on the London-based ICE Futures exchange.

Gold advanced to a three-week high as speculation the U.K. may raise diplomatic pressure on Iran over the seizure of its servicemen. Gold for immediate delivery climbed $1.29, or 0.2%, to $665.70 an ounce in early trade in London. Silver climbed 6.5 cents to $13.34 an ounce, after falling 0.8% yesterday. Platinum gained $8.50 to $1,243.50 an ounce and palladium rose $1 to $353.50.

Currencies

The U.S. dollar traded mixed against other major currencies in European trading Wednesday morning. The euro traded at $1.3340, down from $1.3344 Tuesday in New York. The British pound traded at $1.9624, down from $1.9656. The dollar fetched 117.40 Japanese yen, down from 117.95

[R]5:00AM Copper, gold declined Tuesday, while energy stocks gained.[/R]
The most-active May copper declined 8.10 cents to settle at $3.0575 per pound on the New York Mercantile Exchange. April gold shed $1.40 to finish at $662.50 a troy ounce, while May silver lost 13 cents to $13.28 an ounce. June palladium was off $3 to $356 an ounce, but April platinum rose $5.50 to $1,242 an ounce.

The May crude oil contract gained 2 cents to finish at $62.93 a barrel. April RBOB gasoline advanced 0.53 cent to $2.0730 a gallon after hitting a new seven-month, intraday high of $2.0850 a gallon. April heating oil futures ended up 1.03 cent at $1.7864 a gallon and April natural gas futures gained 24.9 cents, or 3.4%, to settle at $7.503 a million British thermal units, the highest close since Feb. 27. Natural gas futures were boosted by a weather forecast of stronger hurricanes this year in the Gulf of Mexico, which could pose a risk to production in the region.

Arabica coffee futures also dropped. May coffee closed 1.9 cent lower at 1.1245 a pound, while July finished 1.9 cent weaker at $1.1525 a pound. Futures on raw sugar in foreign ports settled higher though, with May sugar closing 0.11 cent higher at 10.11 cents a pound, and July sugar finishing 0.12 cent stronger at 10.17 cents a pound.