Banking Consolidation in Europe

Ivaylo
21 May, 2007
New York City

European markets were mixed in mid-morning trade on Monday as attention was draw to the developments in the Italian banking sector. Acciona of Spain enjoyed strong gains as investors warmed to its transformation story. In Germany the Xetra Dax added 15.6 points or 0.2% but in Paris, the French CAC 40 fell 16.5 points, or 0.3%, and the U.K. FTSE 100 index inched down 0.2%.

[R]6:30AM European stocks are mixed Monday with M&A at the center of attention.[/R]

European markets were mixed Monday. In Germany the Xetra Dax added 15.6 points or 0.2% to 7,623.06 but in Paris, the French CAC 40 fell 16.5 points, or 0.3%, to 6,084.6 and the U.K. FTSE 100 index inched down 0.2% at 6,628.90.

Advancers

Acciona was also in focus, adding 5.9% as Citigroup said the Spanish construction company transformation was being overlooked by the market as they upgraded their recommendation from hold to buy and raised their price target.

German conglomerate Siemens contributed to the industrial sector gains by rising 1.6% in Frankfurt after it turned to an outsider, Merck & Co. executive Peter Loescher, to become its next chief executive.

Bayer rose 5.1%, helped by UBS raising its price target and a buy recommendation reiterated.

Decliners

In Italy, UniCredit fell 1.6% after sealing on Sunday its 22 billion euros acquisition of Capitalia, in an all-paper deal which will create the second largest bank in Europe.

Shares in retail bank Lloyds TSB edged down 0.3% after it stated that it has agreed to sell its registrars business to the investment group Advent International for 550 million pounds.

Banca Popolare di Milano and Banca Popolare dell'' Emilia Romagna approved a merger deal that will create the seventh largest bank in Italy by branch number with a market capitalization of around 12 billion euros. Banca Popolare di Milano shares slid 4%, while Banca Popolare dell'' Emilia Romagna shares were unchanged.

Commodities

Crude oil for June delivery rose 44 cents, or 0.7%, to $65.38 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Brent crude for July settlement gained 87 cents, or 1.3%, to $70.29 a barrel on the ICE Futures Exchange. Gold traded in London at $662.40, up from $660.90 late Friday. Silver opened in London at $12.94, down from $12.96.

Currencies

The U.S. dollar was mostly higher against other major currencies in European trading Monday. The euro traded at $1.3481, down from $1.3505 late Friday in New York. The British pound traded at $1.9701, down from $1.9745. The dollar fetched 121.38 Japanese yen, up from 121.15.

[R]5:30AM Gold and silver finish higher on Friday, while energy stocks end mostly lower.[/R]

June gold advanced $4.80 at $662 a troy ounce on the New York Mercantile Exchange with July silver also gaining 12 cents to end at $13.003. July platinum settled up $8.30 at $1,326.20 an ounce, while June palladium added $4.85 to finish at $365.25 an ounce. The most-active July copper contract rose 1.70 cents to settle at $3.3235 per pound.

June crude oil bucked the downtrend in energy stocks and added 8 cents to close at $64.94 a barrel. June gasoline settled down 2.89 cents at $2.4077 a gallon. June heating oil finished down 2.15 cents at $1.9152 a gallon and June natural gas also ended down 13.1 cents at $7.944 per million British thermal units.

On the New York Board of Trade, July Arabica coffee futures declined 1.30 cents to stop at $1.1180 a pound, with September off 1.30 cents at $1.1460. Most-active July cocoa added $53 to settle at $1,947 per metric ton. Futures on raw sugar in foreign ports for July ended down 0.05 cent at 8.63 cents a pound, with October off 0.09 cent at 8.92 cents.

On the Chicago Board of Trade, corn futures finished lower across the board. July corn ended 1.75-cent lower at $3.7125 per bushel, and December closed 4 cents lower at $3.6650. July soybeans settled 0.25-cent lower at $7.9250 per bushel, and November soybeans ended unchanged at $8.2125. July wheat tumbled 14.25 cents to $4.7125 per bushel.