Europe Rallies on E.On, Iberdrola

Ivaylo
31 May, 2007
New York City

European markets surged Thursday with E.On and Iberdrola leading advancers, after investors shook off concerns on China and after reassuring comments from the Feds on U.S. economy. E.On rallied as it announced $9.4 billion shares buyback and as Belgian billionaire Albert Frere bought a stake in Iberdrola. In early trading, the German DAX Xetra 30 index added 1%, the U.K. FTSE 100 index gained 0.7%, while the French CAC-40 index advanced 0.7%.

[R]6:30AM European markets advance in early trade Thursday on E.On, Iberdrola.[/R]

European markets advanced on Thursday. In early trading, the German DAX Xetra 30 index added 1% to 7,844.36, the U.K. FTSE 100 index gained 0.7% at 6,645.10, while the French CAC-40 index advanced 0.7% at 6,084.08. National benchmarks advanced in all 17 western European markets open except for Ireland.

Advancers

German utility giant E.On traded 5.5% higher the highest in ten years time after announcing late Wednesday that it intends to buy back at least 10% of its own shares by the end of 2008. It also intends to raise dividends by 10%-20% a year on average by 2010.

Iberdrola advanced 3.2% after Albert Frere announced he had purchased 5 % sake of second- largest power company in Spain. Frere investment companies stated late yesterday they paid 2.2 billion euros for the stake.

Scottish & Southern also advanced 1.7% as the supplier of electricity and natural gas announced full-year profit increased 29%, topping estimates. Credit Suisse Group also upped its rating on the stock to outperform from neutral.

ASML gained 5.2% after the maker of semiconductor equipment stated it intends to pay 960 million euros in cash to its shareholders.

Decliners

There were no major decliners in early trade on Thursday.

Oil and gold

A report which the market awaits to show that U.S. gasoline supplies have advanced for a fourth week makes investors shun buying crude oil futures. Crude oil for July delivery was at $63.22 a barrel, down 27 cents on the New York Mercantile Exchange. Brent crude, the benchmark for Europe, was trading at $67.69 a barrel, down 15 cents, on the London-based ICE Futures exchange.

Gold gained in London on talks that inflation will lure investors into buying the precious metal in search of a hedge against increasing raw material prices. Gold gained $4.02, or 0.6%, to $657.47 an ounce, while silver rose 9 cents, or 0.7%, to $13.27 an ounce.

Currencies

The U.S. dollar was virtually unchanged against the euro on Thursday. The euro fetched $1.3437 in early European trading, up from the $1.3436 it bought in New York late Wednesday. The British pound dipped to $1.9744 from $1.9761. The dollar advanced to 121.62 Japanese yen from 121.58 yen on Wednesday.

[R]5:30AM Gold and silver decline on dollar strength, grain rallies.[/R]

Gold futures for June delivery on the New York Mercantile Exchange lost $4.10 to end at $653.10 an ounce, while July silver shed less than a penny to finish at $13.22 an ounce. Copper for July delivery declined 1.65 cents to end at $3.3035 a pound.

Crude oil for July advanced 34 cents to end at $63.49 a barrel on the New York Mercantile Exchange, a slight recovery from the more than $2 decline a day earlier. Gasoline for June lost 2.54 cents to finish at $2.2725 a gallon.

July corn advanced 17.4 cents to finish at $3.822 a bushel on the CBOT, as the dry spell in the eastern Corn Belt also propeled prices higher. Wheat rallied 19.6 cents a bushel to end at $5.106, while a bushel of soybeans rose 10.6 cents to close at $8.082.