Europe Lower on Auto Stocks

Ivaylo
18 Apr, 2007
New York City

European markets traded lower on Wednesday morning, as dropping auto and construction sectors countered gains from chip equipment maker ASML and Swiss drug maker Roche. U.K. investors were wary about the sterling, which traded at a high of $2.0104, a level not seen for 26 years. If the pound stays around the $2 level, it could put the profits of exporters under pressure. The German DAX Xetra 30 index lost 0.6%, the French CAC-40 index declined 0.4% and the U.K. FTSE 100 index slipped 0.3%.

[R]6:30AM European markets were lower on Wednesday on weak auto and construction stocks.[/R]
European markets were lower on Wednesday. The German DAX Xetra 30 index lost 0.6% at 7,305.77, the French CAC-40 index declined 0.4% at 5,836.89 and the U.K. FTSE 100 index slipped 0.3% at 6,476.00. National benchmarks declined in all of the 17 western European markets that were open except Denmark, Switzerland and Portugal.

Advancers

ASML Holding, the largest micro-chip equipment maker in Europe, gained 2.9% as its first-quarter net profit nearly doubled to 153 million euros, or $208 million, from 80 million euros a year earlier.

Swiss drug maker Roche Holdings announced that its first-quarter sales rose 16% in Swiss francs to 11.4 billion francs and also upgraded its 2007 earnings-per-share outlook. Pharmaceutical division sales grew 18% in Swiss francs to 9.14 billion francs, with key oncology, virology, transplantation, osteoporosis and rheumatoid arthritis medicines contributing to strong growth. Roche upgraded its core earnings per share outlook to reflect expected growth above group sales growth. Shares advanced 2.2%.

Music company EMI Group gained 2.7% as it expects to report underlying earnings before interest, tax, depreciation and amortization for the year ended March 31 of around 174 million pounds, which it said is ahead of the market forecast.

Decliners

BMW and DaimlerChrysler lost more than 1% in morning trading as crude price rose 28 cents to $64.74 a barrel. Nokia and Atos Origin SA led technology-related shares lower. Nokia, which announced a partnership with Yahoo in January, dropped 1.1%. Atos, the official supplier of computer services for the Beijing Olympics, lost 1.3% after Citigroup Inc. lowered its recommendation to sell from hold.

Eiffage SA, the third-biggest construction company in France, sank 3.3%. Sacyr Vallehermoso, the largest shareholder company of the company, and Spanish investors walked out of the Eiffage shareholders meeting today. Eiffage asked to block the voting rights of the Spanish investors.

Oil and precious metals

Crude oil fell amid expectations supplies of crude will meet demand from refineries working to produce more fuel before the summer driving season. Crude oil for May delivery fell 65 cents, or 1 %, to $62.45 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The contract, which expires at the end of this week, traded at $62.65 this morning in London. The more actively traded June contract fell 60 cents to $63.86.

Brent crude oil for June settlement decreased 93 cents, or 1.4%, to $65 a barrel in electronic trading on the ICE Futures exchange and traded at $65.21 this morning in London.

Gold climbed to its highest since May in London after investors bought the commodity as a hedge against declines in the U.S. dollar, which dipped close to a two- year low against the euro. Silver and platinum also gained. Gold for immediate delivery in London rose as much as $4.60, or 0.7 %, to $691.15 an ounce, the highest since May 12. It traded at $689.75. Silver for immediate delivery gained rose 14 cents, or 1%, to $11.035. Platinum increased $11.50, or 0.9%, to $1,282.50 an ounce and palladium dropped $4, or 1.1%, to $372.50.

Currencies

The dollar closed in on an all-time low against the euro and fell further against the British pound European trading Wednesday morning. The euro traded at $1.3607, up from $1.3593 late Tuesday in New York. The British pound traded at $2.0110, up from $2.0066. The pound has reached its highest level since 1981. The dollar bought 118.68 Japanese yen, down from 118.95.

[R]5:00AM Copper gains on fund buying, while gold dips on profit-taking.[/R]
The May copper contract gained 13.75 cents to end at $3.6770 per pound on the New York Mercantile Exchange, while July gained 13.70 cents to finish at $3.6790 a pound. June gold fell $2 to $692.50 a troy ounce, and May silver shed 6 cents to $14.02 an ounce. July platinum fell $8.60 to $1,280.90 an ounce, but June palladium added $1.35 to finish at $380.35 an ounce.

Front-month May crude oil closed 51 cents lower at $63.10 a barrel, while June crude fell $1.21 to settle at $64.46 a barrel. May gasoline futures dipped 5.99 cents to close at $2.0558 a gallon. May heating oil lost 6.15 cents to settle at $1.7978 a gallon. Natural gas for May delivery ended 11.2 cents lower at $7.418 a million British thermal units.

Arabica coffee futures advanced. The May contract finished 1.15 cents higher at $1.0960 a pound. May corn settled 11 cents lower at $3.5325 per bushel, July corn declined 10.75 cents to $3.6525 a bushel, and December corn also fell 10.75 cents to $3.7950 a bushel.