Europe Advances on Bid Talk

Ivaylo
16 Apr, 2007
New York City

European markets advanced for a second day after several banks including Royal Bank of Scotland may offer to buy ABN Amro and as Royal Philips Electronics reported profit that beat analysts'' expectations. ABN Amro shares surged to a record high. Royal Bank of Scotland and ING also rallied. The U.K. FTSE 100 added 0.5%, DAX Xetra 30 in Frankfurt rose 0.7% and CAC 40 in France increased 0.6%.

[R]7:00AM European markets gained on M&A activity including ABN Amro.[/R]
European markets advanced on Monday. National benchmarks advanced in all of the 17 western European markets that were open except Luxembourg. The U.K. FTSE 100 index rose 0.5% at 6,487.20, the German DAX Xetra 30 index added 0.7% at 7,252.88 and the French CAC-40 index advanced 0.6% at 5,822.51.

Advancers

ABN Amro rallied 5.5%. The bank, which started last month exclusive talks with Barclays, announced late April 13 that it received a letter from Royal Bank of Scotland, Santander Central Hispano and Fortis, asking for exploratory talks and saying they may offer to buy ABN Amro.

Royal Bank of Scotland advanced 3.5%, and ING, the biggest Dutch financial-services company, climbed 1.6%. Barclays shares rose 0.9%.

Philips gained 3.6 %, the highest since June 2002. First-quarter profit jumped to 875 million euros from 160 million euros a year earlier on a gain from the sale of a stake in Taiwan Semiconductor Manufacturing Co.

Miners also climbed. BHP Billiton Ltd., the biggest mining company, added 1.4%, while Rio Tinto Group, the third- largest, climbed 1.4%.

Swedish clothing retailer Hennes & Mauritz rose 2.8% after announcing that comparable sales rose 17% in March, lifted by warmer weather.

Decliners

Eiffage SA, third-biggest builder in France, lost 2.2%. The stock market regulator of the country, the Aurorite des Marches Financiers, has forced Eiffage to let worker shareholders dispose freely of their shares..

Oil and precious metals

Crude oil gained above $64 a barrel in New York on expectations of higher gasoline demand this summer in the U.S. Crude oil for May delivery rose 39 cents to $64.02 a barrel in after-hours electronic trading on the New York Mercantile Exchange in early trade in London. Brent crude for June settlement gained 37 cents to $69 a barrel in electronic trading on the ICE Futures exchange.

Gold surged to a nine-week high on speculation that rising commodity costs and a decline in the dollar will boost demand for the metal as a hedge against inflation. Silver also gained. Gold for immediate delivery gained $2.13, or 0.3%, to $687.65 an ounce in London. Platinum for immediate delivery rose $11.50, or 0.9%, to $1,282.50 an ounce after earlier climbing to $1,286.50, the highest since Nov. 21. Silver advanced 1.5 cents to $14.085 and palladium gained 50 cents to $377.50.

Currencies

The U.S. dollar was mostly lower against other major currencies in European trading Monday morning. The euro traded at $1.3561, up from 1.3539 late Friday in New York. The British pound traded at $1.9936, up from $1.9870. The dollar bought 119.33 Japanese yen, up from 119.12.

[R]5:30AM Gold surges on Friday, crude oil edges lower, copper gains.[/R]
June gold surged $10.20 to end at $689.90 a troy ounce on the New York Mercantile Exchange, while May silver gained 23.5 cents to settle at $14.09 an ounce. July platinum rose $6.90 to $1,286.40 an ounce, and June palladium climbed $6.75 to $381.05 an ounce. The most-active May copper contract advanced 3 cents to settle at $3.5320 per pound.

The May crude oil lost 22 cents to close at $63.63 a barrel after rising to $64.58 a barrel Friday. May gasoline declined 1.21 cent to $2.1797 a gallon after reaching a new eight-month high of $2.2134 a gallon. May heating oil ended with a loss of 0.54 cent at $1.9007 a gallon. Natural gas for May delivery finished 12.3 cents lower at $7.801 a million British thermal units.

Futures on raw sugar in foreign ports were narrowly mixed. May sugar settled 0.02 cent higher at 9.90 cents a pound, while July sugar ended 0.01 cent lower at 9.87 cents a pound. Arabica coffee futures dipped Friday. May coffee ended 1.05 cent lower at $1.1180 a pound, and July coffee finished 1.05 cent lower at $1.1465 a pound.