Europe Rises on Sarkozy

Ivaylo
07 May, 2007
New York City

European markets opened higher on Monday, responding to gains in overseas markets, the election of Nicolas Sarkozy as next president of France and the sale of two education units by Reed Elsevier. There were holidays in several European countries and the U.K. stock market was shut, keeping volumes low. The French CAC 40 rose 0.2%, after the favored candidateof the market, the conservative Sarkozy, defeated Segolene Royal in a vote on Sunday, while the German DAX 30 rose 0.2%.

[R]6:30AM European markets opened higher on Monday on strong U.S. close.[/R]

European markets traded higher in mid-morning on Monday. The French CAC 40 rose 0.2% at 6,081.78, while the German DAX 30 rose 0.2% at 7,533.35.

Advancers

Though markets were expecting Sarkozy to to win, shares of Bouygues advanced 2.7%, on expectations that the new president would welcome a tie-up involving Bouygues, 21% held Alstom and nuclear plant operator Areva. Alstom rose 2.5% and Areva gained 0.5%.

EADS added 1.6%, as there were fears that the election of Royal would halt a restructuring program at the Airbus owner.

Reed Elsevier advanced 3.1%. Pearson, publisher of Penguin Group, agreed to buy Reed Elsevier Harcourt businesses for $950 million in cash to bolster its international reach in education publishing.

Rheinmetall added 3.2%. The German maker of car parts and military equipment announced first-quarter net income advanced by almost a third to 22 million euros because of higher sales at both the automotive and defense businesses.

Shares of Altana, the German chemical maker that sold its drugs unit in December, added 5.6%.

Decliners

ABN Amro lost 1.4% after calling a $24.5 billion offer for its Chicago-based LaSalle unit not superior from a group led by the Royal Bank of Scotland to the $21 billion bid from Bank of America.

Shares of PPR of France edged 0.2% lower after Puma which it has agreed to buy, lowered its profit and sales outlook for the year after reporting a 4% first-quarter profit rise. Puma stated sales and earnings should grow in the low single digits, against an earlier forecast that profit would grow at least 10% and sales to rise in the mid-to-high single digits. Shares of Puma weakened 0.3%.

Commodities

Crude oil was little changed, after falling 6.8% last week because of ample U.S. supplies and signs gasoline output is increased as refiners return plants from maintenance. Crude oil for June delivery was at $61.95 a barrel, up 2 cents, in after-hours electronic trading on the New York Mercantile Exchange. Gasoline for June delivery was at $2.2050 a gallon in after-hours trading.

Gold for immediate delivery rose 50 cents, or 0.1%, to $689.35 an ounce in early trading in London. Silver for immediate delivery added 9 cents, or 0.7%, to $13.52 an ounce. Platinum rose $19, or 1.4%, to $1,339.50 an ounce, the highest in almost six months, as some traders said U.S. demand for the metal, used in devices that curb car-exhaust pollution, may be stronger than previously anticipated. Palladium, also used in the pollution-control devices, gained $3, or 0.8%, to $378.5 an ounce.

Currencies

The euro rose above $1.36 against the dollar in European trading on Monday as markets looked toward interest rate decisions this week by European, U.S. and British central banks. In Frankfurt, the the euro rose to $1.3610 before settling back to $1.3602, slightly higher than the $1.3593 it bought in New York late Friday. The dollar was down slightly against the British pound, trading at $1.9966 in Frankfurt, compared with $1.9929 late Friday. The dollar bought 119.89 Japanese yen, down slightly from the 120.13 it bought in New York late Friday.

[R]5:00AM Gold finishes lower Friday on weaker dollar and disappointing U.S. job data.[/R]

June gold surged $5.30 to end at $689.70 a troy ounce on the New York Mercantile Exchange, while July silver added 2 cents to close at $13.53. July platinum settled up $18 at $1,328.80 an ounce and June palladium ended up 50 cents at $377 an ounce. The most-active July copper contract rose 3.20 cents to settle at $3.7585 per pound.

June crude oil futures declined 49 cents to close at $63.19 a barrel. June gasoline futures dropped 3.12 cents to finish at $2.2164 a gallon, after trading at $2.2905. June heating oil settled down 1.44 cent at $1.8309 a gallon. June natural gas ended down 0.9 cent at $7.938 per million British thermal units.

On the New York Board of Trade, Arabica coffee futures for May advanced 1.65 cent at $1.0300 a pound, with July up 1.65 cent at $1.0600. Most-active July cocoa lost $6 to close at $1,873 a metric ton. Futures on raw sugar in foreign ports for July settled up 0.05 cent at 9.34 cents a pound, with October up 0.09 cent at 9.63 cents.