Europe Gains on M&A, Turkey Slumps

Ivaylo
30 Apr, 2007
New York City

European markets traded in positive territory on Monday morning, as Telecom Italia advanced after a deal was made for a minority stake to be bought by Telefonica. Oil and gas companies saw their shares gain slightly, while ABN Amro was lower on an expectation of a decision from a local court. Stocks in Turkey plunged on political tensions. The U.K. FTSE 100 index rose 0.8%, the German DAX Xetra 30 index increased 0.4% and the French CAC-40 index advanced 0.4%.

[R]6:30AM European stocks gain Monday on Telecom Italia and Telefonica deal.[/R]
European markets were higher in morning trade on Monday. The U.K. FTSE 100 index rose 0.8% at 6,471.50, the German DAX Xetra 30 index increased 0.4% at 7,405.80 and the French CAC-40 index advanced 0.4% at 5,952.73. National benchmarks increased in 13 of the 16 western European markets that were open.

Advancers

Telecom Italia advanced 1.5% after Spanish phone company Telefonica and a group of Italian financial large-caps Saturday bought 100% of Telecom Italia largest shareholder, finishing a long battle over control of the main telecommunications operator in Italy in a 4.1 billion euro deal. Telefonica shares rose 0.6%.

Oil and gas companies were higher with BP gaining 0.6% after a report that it is leading the race to buy a controlling stake in Pakistan State Oil in a deal worth around $600 million. Shares in Eni advanced 0.2% as it agreed to buy the Gulf of Mexico upstream assets of Dominion for $4.76 billion in cash.

Decliners

Bank deals hogged the limelight as well, with ABN Amro shares off 0.1% after an Amsterdam court announced on Saturday that it would decide next Thursday on whether or not to freeze the sale of ABN Amro LaSalle Bank to Bank of America.

Turkish lira plunged the most in 11 months and bonds and stocks slumped after the military threatened to block the presidential candidate of the ruling party because of his support for Islamist causes.

Oil and precious metals

Crude oil declined in New York as worries abated that supplies from Saudi Arabia would be disrupted, after security forces crushed a plot to attack oil fields and refineries in the world largest producer of petroleum. Crude oil for June delivery was at $66.13 a barrel, down 33 cents, on the New York Mercantile Exchange. In London, Brent crude oil for June settlement was at $68.14 a barrel, down 21 cents, in electronic trading on the ICE Futures exchange.

Gold for immediate delivery dropped $4.10, or 0.6% to $677.45 an ounce in early trade in London.. Silver fell 7.5 cents to $13.46 an ounce, after a drop of 2.9% last week.

Currencies

The U.S. dollar was mostly higher against other major currencies in European trading Monday morning. The euro traded at $1.3607, down from $1.3643 late Friday in New York. The British pound traded at $1.9918, down from $1.9970. The dollar fetched 119.61 Japanese yen, down from 119.65.

[R]5:30AM Gold and silver advance Friday on weaker dollar, thwarted terrorist plot.[/R]
June gold ended up $3.80 at $681.80 a troy ounce on the New York Mercantile Exchange, while July silver finished 12 cents higher at $13.575 an ounce. June palladium settled up $1.05 at $374.45 an ounce, but July platinum bucked the overall trend and closed down $10.60 at $1,293. The most-active July copper contract rose 2.35 cents to settle at $3.5325 per pound.

The June crude oil contract advanced $1.40 to end at $66.46 a barrel. May gasoline surged 7.10 cents to finish at $2.3613 a gallon. May heating oil gained 2.44 cents to close at $1.9135 a gallon. June natural gas added 22.9 cents to end at $7.831 per million British thermal units.

On the New York Board of Trade, Arabica coffee futures May ended lower 0.6 cent at $1.0375 a pound, with July off 0.5 cent at $1.0675. On the Chicago Board of Trade, May corn lost 0.50 cent to $3.6425 per bushel, July fell 1.50 cents to $3.7375 and December settled 6.50 cents lower at $3.6750.