Europe Boosted by Insurers

Ivaylo
17 May, 2007
New York City

European markets advanced in early trading on Thursday, with U.K. insurer Prudential leading gainers on talk that it may be bought out and by conglomerates including Siemens and Philips Electronics. Volumes were low in Europe with many traders on vacation for the Ascension Day holiday. The U.K. FTSE 100 gain 0.3%, the German DAX 30 advanced 0.5% and the French CAC 40 improved 0.4%.

[R]6;30AM European markets gain Thursday on takeover speculation.[/R]

European markets advance on Thursday. The U.K. FTSE 100 rose 0.3% to 6,578.30, the German DAX 30 rose 0.5% to 7,519.75 and the French CAC 40 improved 0.4% to 6,043.02.

Advancers

Prudential gained 1.5% as the insurer was due to hold its annual meeting. Prudential has already sold its Egg online banking unit to Citigroup but fund-management group Hermes has asked for a break-up, and the decision by rating concern Moody’s to put a negative outlook on its U.K. arm will raise the pressure on the company.

Old Mutual rose 1.8% after Deutsche Bank upgraded the Anglo-South African company to buy from hold. Emap rallied 4.2% after Tom Moloney, its chief executive, resigned. The company reiterated its earnings outlook for the year.

Cairn Energy, an oil explorer in India, gained 4.1% as a bid could be imminent. Cairn spokespeople could not be reached for comment.

British Airways climbed 2.2 % after Goldman, Sachs & Co. commented that third-largest airline was the jewel in the crown for private equity investors.

Decliners

BT Group declined 1% after the U.K. fixed-line operator reported a 10% increase in adjusted profit before tax and a below-forecast 3% rise in quarterly revenue. BT also announced it would buy back 2.5 billion pounds of shares and lift its dividend 27%.

SABMiller shed 0.3% lower after the brewer posted a 14.5% annual profit rise. In North America, operating profit dropped 17% to $375 million due to rising commodity costs, declining Miller Lite volume, and price competition in the economy segment.

Sainsbury dropped 0.9% after JPMorgan Chase & Co lowered its recommendation for the third-largest supermarket chain in the UK to underweight from neutral.

Commodities

Crude oil for June delivery rose 45 cents, or 0.7%, to $63 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Brent crude oil for July settlement rose 77 cents to $68.78 a barrel in electronic trading on the ICE Futures exchange.

Gold traded in London at $663.20, down from $666.40 late Wednesday. Silver opened in London at $12.84, down from $13.05.

Currencies

The dollar was mixed against other major currencies in European trading Thursday morning. The euro traded at $1.3526, up from $1.3520 late Wednesday in New York. The British pound traded at $1.9773, down from $1.9781. The dollar fetched 120.96 Japanese yen, up from 120.74.

[R]5:30AM Gold and silver tumble Wednesday, soybeans surge sharply.[/R]

June gold plungedl $13 to finish at $661.50 a troy ounce on the New York Mercantile Exchange, while July silver plummeted 38.5 cents to close at $12.93 an ounce. July platinum fell $13.80 to $1,325.80 an ounce, while June palladium held up better, shedding just 95 cents to $357.50 an ounce. The most-active July copper contract lost 11.50 cents to settle at $3.4225 per pound.

July soybeans ended 14.75 cents higher at $7.9275 a bushel, and November soybeans finished 14.25 cents stronger at $8.2125 a bushel. July wheat slipped 5.25 cents to $4.9675 a bushel. July corn finished 4.5 cents higher at $3.76 a bushel. July Arabica coffee closed 2.4 cents stronger at $1.0970 a pound, while September coffee closed 2.4 cents higher at $1.1250 a pound. July raw sugar settled 0.03 cents higher at 8.68 cents a pound.

The front-month June crude oil contract ended 62 cents, or 1%, lower at $62.55 a barrel, after earlier trading at $61.90 a barrel. Front-month June gasoline futures gained 3.54 cents, or 1.5%, to finish at $2.337 a gallon. June heating oil fell 2.32 cents, or 1.3%, to $1.867 a gallon. Natural gas for June delivery settled 2.6 cents higher at $7.89 a million British thermal units.