Mergers Buoy Europe

Ivaylo
09 May, 2007
New York City

European market advanced on Wednesday, powered by talk of consolidation in the mining sector in London and recovering banking stocks after the previous session profit taking. Mining companies led advancers, on speculation Rio Tinto Group will receive a bid from BHP Billiton. By late morning, Frankfurt Xetra Dax added 0.4%, the CAC 40 climbed 0.3% and London FTSE 100 gained 0.3%.

[R]6:30AM European markets gain Wednesday as miners lead on merger talk.[/R]
European markets are higher on Wednesday. By late morning in London, Frankfurt Xetra Dax added 0.4% to 7,468.53, the CAC 40 climbed 0.3% to 6,054.42 and London FTSE 100 gained 0.3% to 6,571.4. National benchmarks gained in 12 of 18 western European markets except Iceland.

Advancers

London-listed miners led gainers amid rumours BHP Billiton was ready to make a takeover offer for Rio Tinto. Rio shares added 5.8% and BHP gained 3%, while expectations of consolidation within the sector drove Kazakhmys 3.1% higher and Xstrata climbed 2.4%.

Financial sector gains were led by BNP Paribas of France, which added 3.8% to a record high after posting forecast-topping first-quarter profit, lifted by investment banking and asset management gains. Credit Agricole rose 3.1% as takeover speculation continued to drift among the banking stocks.

Decliners

Aegon slipped 3.7%. The second- biggest Dutch insurer announced first-quarter profit fell 23% to 485 million euros, missing analyst estimates of 619 million euros, as one-time gains were not repeated.

Technology shares declined after the quarterly sales forecast of Cisco Systems, the world biggest maker of computer-networking equipment, missed estimates for the first time in a year.

Alcatel-Lucent, supplier of telecommunications equipment, slid 0.9%. Infineon Technologies AG, Europe second-largest maker of semiconductors, slipped 0.4%.

Commodities

Crude oil traded little changed in New York, near $62 a barrel, after Chevron said four contractors were kidnapped in Nigeria, raising concern supplies from the largest producer in Africa would be disrupted. Crude oil for June delivery was trading at $62.16 a barrel, down 10 cents, in after-hours trading on the New York Mercantile Exchange. Gasoline for June delivery was up 0.12 cents at $2.2057 a gallon in after-hours trading in New York.

Gold for immediate delivery was little changed at $685.62 an ounce in early trade in London . Silver dropped 1 cent to $13.495 an ounce.

Currencies

The dollar was mixed against other major currencies in European trading Wednesday morning. The euro traded at $1.3542, down from $1.3545 late Tuesday in New York. The British pound traded at $1.9918, up from $1.9889. The dollar bought 119.93 Japanese yen, down from 119.95.

[R]5:30AM Gold and silver decline Tuesday on dollar strength.[/R]
June gold declined $3 to end at $687.40 a troy ounce on the New York Mercantile Exchange, while July silver lost 4 cents to finish at $13.60. July platinum settled down $7.70 at $1,343.20 an ounce after trading at $1.335.80 and June palladium settled down $3.25 at $375.95 an ounce. The most-active July copper contract gained 0.70 cent to settle at $3.7225 per pound.

June crude oil futures advanced 79 cents to stop at $62.26 a barrel. June heating oil also gained 2.70 cents to close at $1.8299 a gallon. June gasoline futures settled up 1.49 cent at $2.2046 a gallon, after trading at $2.2075. June natural gas bucked the uptrend and dipped 14.2 cents to end at $7.637 per million British thermal units.

On the New York Board of Trade, July Arabica coffee futures ended up 0.45 cent at $1.0525 a pound, with September 0.45 cent higher at $1.0810. July cocoa settled up $17 at $1,890 a metric ton. Futures on raw sugar in foreign ports for July lost 0.10 cent to close at 9.22 cents a pound, with October off 0.09 cent at 9.52 cents.