Bid Talk Fails to Lift Europe

Ivaylo
05 Apr, 2007
New York City

French aerospace group Safran was in the focus on European markets on Thursday on reports it could merge with defence electronics group Thales. Stocks fell after China decided to reduce bank lending, raising concern investment will slow down. By mid morning, the main indices were lower as caution was the key word ahead of the Easter holiday weekend. Frankfurt Xetra Dax was flat, the CAC 40 in Paris lost 0.2% and London FTSE 100 was flat.

[R]6:30AM European stocks were lower despite merger and acquisition speculation.[/R]
European markets were lower on Thursday. By mid-morning, Frankfurt Xetra Dax was flat at 7,076.62, the CAC 40 in Paris lost 0.2% to 5,730.12 and London FTSE 100 was flat at 6,363.4. National benchmarks fell in 13 of the 15 markets in western Europe that were open.

Advancers

Safran SA curbed declines today after it was reported the company and Thales SA, Europe largest defense-electronics company, may revive plans to merge. Safran gained 4%, while Thales was 0.3% higher.

Takeover talk lifted French construction group Eiffage 0.8% after Spanish rival Sacyr Vallehermoso, recently linked to an Eiffage bid, announced it was increasing its stake closer to the one-third level that would trigger a mandatory takeover bid.

Air France-KLM Group advanced 3.7%. Europe biggest airline may join Aeroflot and UniCredit in bidding for a stake in Alitalia, even though the deadline for new bidders has passed, as stated by Italian Industry Minister Periluigi Bersani.

Decliners

Volvo fell 3.2 % after chief executive Leif Johansson stated acquisitions would continue to make up half of the targeted 10 % annual growth of the company.

BHP Billiton, the world largest mining company, decreased 0.6%. China is the second-biggest market after Europe for the company. Anglo American, the second-largest, shed 0.6%. Antofagasta, which owns three copper mines in Chile, fell 1.5%.

Scottish & Newcastle lost 1.2% and shares of the largest brewer in theU.K were cut to sell from hold at ING Groep NV and downgraded to reduce from hold at Dresdner Kleinwort.

Oil and gold

Crude oil was little changed near a one-week low in New York after Iran released 15 British navy personnel, easing concern that supply from the Middle East may be disrupted. Crude oil for May delivery was at $64.35 a barrel, down 3 cents, in after-hours electronic trading on the New York Mercantile Exchange. In London, Brent crude for May settlement was at $68.55 a barrel, up 15 cents, in electronic trading on the ICE Futures exchange.

Gold was unchanged in London and traded at $672.60 per troy ounce, unchanged from late Wednesday. Silver opened in London at $13.56 per troy ounce, up from $13.52.

Currencies

The dollar was mostly higher against other major currencies in European trading Thursday morning. The euro traded at $1.3360, down from $1.3367 late Wednesday. The British pound traded at $1.9736, down from $1.9753. The dollar bought 118.74 Japanese yen, up from 118.67.

[R]5:30AM Copper ended higher Wednesday, while gold surged, as did silver.[/R]
The most-active May copper contract gained 7.3 cents to end at $3.3875 per pound on the New York Mercantile Exchange. June gold advanced $7.70 to settle at $677.40 a troy ounce, and May silver gained 19 cents to close at $13.62 an ounce. July platinum added $6.60 to finish at $1,258.90 an ounce, but June palladium fell $1.60 to settle at $354.15 an ounce.

In Nymex energy trading, crude oil prices declined after Iranian President Mahmoud Ahmadinejad announced his country will release the sailors and marines. The front-month May crude oil contract settled 26 cents lower at $64.38 a barrel. May gasoline rose 8.77 cents to finish at $2.1054 a gallon. May heating oil advanced 2.57 cents to close at $1.8644 a gallon. Natural gas for May delivery ended 8.9 cents higher at $7.515 a million British thermal units.

On the Chicago Board of Trade, corn futures rebounded after the sharp decline in the last few days. May corn surged 13 cents to finish at $3.5925 a bushel. May Arabica coffee futures finished 0.20 cents lower at $1.1055 a pound.