Merger Talk Buoys Europe

Ivaylo
01 Jun, 2007
New York City

European markets advanced on Friday as bid talk involving GBL outweighed caution ahead of U.S. non-farm payroll data some time later today. Merger and acquisition activity have been valued at $1.25 trillion sp far this year in Europe. Back in Europe, other gainers included French utility Lafarge, as well as Metro. By late morning, Frankfurt Xetra Dax added 0.7%, the CAC 40 in Paris gained 0.5% and London FTSE 100 climbed 0.4%.

[R]6:30AM European markets advance Friday on merger talk in utilities.[/R]

European markets were higher on Friday. By late morning, Frankfurt Xetra Dax added 0.7% to 7,934.85, the CAC 40 in Paris gained 0.5% to 6,135.32 and London FTSE 100 climbed 0.4% to 6,647.1. National benchmarks rose today in all of the 17 western European markets that were open except Portugal, Luxembourg and Greece.

Advancers

Iberdrola, the second-largest power company in Spain, surged 3.1%. Lafarge, the world biggest cement maker, advanced 1.9%. GBL owned by Belgian Albert Frere intends to raise more than 1 billion euros, or $1.3 billion by selling new shares. GBL is the largest shareholder in French utility Suez and holds a stake in Lafarge.

British Energy Group gained 2.8%. The U.K. government said it sold 400 million shares in British Energy, raising money to pay for the decommissioning of nuclear reactors owned by the country biggest power generator. Électricité de France, rose 2.6% after the head of the company raised the possibility of joint ventures with Gaz de France.

Reatlers were also higher. Metro, which had its price target raised by Bernstein, gained 3.4%, while Karstadt Quelle added 0.6%.

Decliners

Investment group GBL, reported to be considering a over 1 billion euros capital was down 0.4%.

Banca Italease plunged 13%. The stock slid 2.5% yesterday after MF reported that the chairman of the bank will soon present to the board the results of an internal investigation into the relationship between its chief executive and a real-estate investor who is facing criminal charges.

Commodities

Crude oil was virtually unchanged despite concern U.S. refiners are not increasing gasoline production fast enough to replenish fuel stockpiles for the summer. Crude oil for July delivery was $64.06 a barrel, up 5 cents, in after-hours electronic trading on the New York Mercantile Exchange. Brent crude oil for July settlement was trading for $67.86 a barrel, down 18 cents, on London ICE Futures exchange.

Gold advanced in London on indications that demand for jewelry and coins is strengthening. Silver gained for a second consecutive day. Gold rose $2, or 0.3%, to $662.50 an ounce. Silver advanced 3.5 cents, or 0.3%, to $13.47 an ounce

Currencies

The dollar gained against the euro ahead of a U.S. employment data Friday. The euro bought $1.3446 in morning European trading, compared with $1.3453 in New York late Thursday. The British pound edged down to $1.9791 from $1.9796, while the dollar rose to 121.89 Japanese yen from 121.73 yen.

[R]5:30AM Gold and silver gain Thursday on a softer dollar, gasoline declines.[/R]

Gold for June delivery gained $7.90 to end at $661 an ounce on the New York Mercantile Exchange, while July silver advacned 25 cents to finish at $13.47 an ounce. Copper gained more than 2% as inventories decreased further. On the London Metal Exchange on June 1, copper for delivery in three months advanced 0.7%, to $7,430 a ton

Crude oil for July delivery rose 52 cents to settle at $64.01 a barrel. The June contract for gasoline, which expires Thursday, lost 2.13 cents to settle at $2.2512 a gallon on Nymex. July gasoline futures finished a fraction of a penny higher at $2.2032.

July wheat surged 6.2 cents on the Chicago Board of Trade to end at $5.17 a bushel, while July corn gained 8 cents to close at $3.902 a bushel. Arabica coffee futures for July delivery rose 0.55 cent, or 0.5%, to $1.110 a pound on May 31 on the New York Board of Trade.