Banks Drag Europe Lower

Ivaylo
16 May, 2007
New York City

Losses for banking stocks sent European stock markets lower on Wednesday, paring gains for oil stocks and carmakers. Banks dipped, led by Credit Agricole after the French lender reported first-quarter net profit that failed to meet market forecasts. In mid morning trade, Frankfurt Xetra Dax lost 0.2%, the CAC 40 in Paris shed 0.2% and London FTSE 100 was flat.

[R]6:30AM European markets decline Wednesday on weak banking stocks.[/R]

European markets declined on Wednesday. In mid morning trade, Frankfurt Xetra Dax lost 0.2% to 7,494.37, the CAC 40 in Paris shed 0.2% to 6,037.78 and London FTSE 100 was flat at 6,567.6. National benchmarks fell in nine of 17 markets in western Europe.

Advancers

Oil stocks were higher, with Spanish Repsol up 0.9% and Royal Dutch Shell 0.6% higher. Shares in Volkswagen, which experienced an over sales decline of 0.2%, were up 2.2% thanks to strength at Audi, its luxury brand, whose sales rose 7.8%.

Julius Baer, Swiss private bank, rose 3.9% on speculation that Deutsche Bank was interested in mounting a takeover.

Zurich Financial, the Swiss insurer, climbed 2.2% after reporting a 71% rise in first-quarter net profit, beating expectations, thanks to strong gains in emerging markets such as China.

Decliners

Credit Agricole slumped 4.3%. The bank said first-quarter net income rose 92% to 2.66 billion euros after a gain from reducing its stake in the Intesa Sanpaolo of Italy. That missed the 2.74 billion-euro median estimate.

Shares of Air France-KLM, the biggest airline in Europe, slipped 2.4% after UBS AG cut its recommendation to neutral from buy.

EasyJet fell 2.4% after Goldman, Sachs & Co. put the carrier shares on its Pan-Europe Sell List, cutting its recommendation to sell from neutral.

Commodities

Crude oil traded near $63 a barrel in New York after unrest disrupted production in Nigeria. Crude oil for June delivery fell 9 cents to $63.08 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Gold for immediate delivery rose as much as $1.50, or 0.2%, to $673.55 an ounce and traded at $673.35. Silver for immediate delivery was unchanged at $13.20 an ounce at the same time.

Currencies

The U.S. dollar was mostly higher against other major currencies in European trading Wednesday morning. The euro traded at $1.3594, up from $1.3592 late Monday in New York. The British pound traded at $1.9834, down from $1.9853. The dollar fetched 120.48 Japanese yen, up from 120.26.

[R]5:30AM Raw sugar declines on Tuesday, while gold and silver advance.[/R]

Futures on raw sugar in foreign ports for July dipped 0.46 cent to end at 8.65 cents a pound, with October off 0.41 cent at 9.00 cents.

Front-month June gold settled up $4.40 at $674.50 a troy ounce on the New York Mercantile Exchange and July silver ended up 8 cents at $13.315. July platinum finished up $10.30 at $1,339.60 an ounce, while June palladium lost $2.25 to close at $358.45 an ounce. The most-active July copper contract settled up 4.05 cents at $3.5375 per pound.

The front-month June light, sweet crude contract gained 71 cents to finish at $63.17 a barrel. June gasoline also advanced 0.04 cent and ended at $2.3016 a gallon. June heating oil settled up 2.34 cents at $1.8902 a gallon, while June natural gas bucked the uptrend and lost 8.8 cents to close at $7.864 per million British thermal units.

On the New York Board of Trade, Arabica coffee futures for May delivery settled up 0.45 cent at $1.0465 a pound, with July up 0.45 cent at $1.0730. Most-active July cocoa lost $25 to settle at $1,901 a metric ton.