Europe Gains on Telecoms

Ivaylo
05 Jun, 2007
New York City

European markets advanced on Tuesday as telecoms stocks, financials and oil groups all added up to the cautious recovery coming after recent China market slump. Telecoms were higher as bid talk was in focus involving Vodafone viewed as a potential private equity fund target. In late morning trade, Frankfurt Xetra Dax added 0.2%, the CAC 40 in Paris climed 0.2% and London FTSE 100 gained 0.3%.

[R]6:30AM Europe is higher on Tuesday on telecoms, banks and oil stocks.[/R]

European markets were higher on Tuesday. . In late morning trade, Frankfurt Xetra Dax added 0.2% to 7,989.82, the CAC 40 in Paris climed 0.2% to 6,135.28 and London FTSE 100 gained 0.3% to 6,685.0. In Europe, national benchmarks rose in 12 of the 16 western European markets that were open.

Advancers

Vodafone, the mobile-phone operator, added 1.1%. The company climbed after the reports said the mobile-phone company might be worth more split into parts, giving rise to speculation it may be a target for a takeover. AT&T or a group of hedge funds could be interested in a takeover.

Norway Telenor rose 1.9% after it said it would pay no more than a full and fair price for the share of Russian Vimpelcom owned by investment company Alpha Group.

Renault, the French carmaker, led the auto sector higher after Carlos Ghosn, chief executive, announced the company was on track to meet its 2009 targets. Renault gained 2.6%.

German drugmaker Merck rose 6.2% on recent successful trial results on its cancer drug Erbitux, and expectations that it will replace pharmaceuticals rival Altana in the blue chip Xetra Dax index.

Decliners

Ryanair, the Irish airline, fell 7% after the company warned that higher UK interest rates and increases in airport tax and passenger charges would hit growth in the sector.

Ryanair takeover target Aer Lingus fell 3.5% in spite of reassurances that Ryanair would not sell its stake should the European Union turn down its merger plans. Other airlines also fell in sympathy. Air France-KLM fell 1.1%, while German Lufthansa slipped 0.2%.

Commodities

Crude oil for July delivery fell 49 cents, or 0.7%, to $65.72 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Brent crude oil for July settlement dropped 40 cents, or 0.6%, to $70 a barrel on the London-based ICE Futures exchange.

Gold for immediate delivery rose $1.60, or 0.2%, to $672.75 an ounce. Silver for immediate delivery gained 8 cents, or 0.6%, to $13.77 an ounce.

Currencies

The euro strengthened to a record against the yen and gained versus the dollar on expectations the European Central Bank will hike interest rates tomorrow and signal further increases this year. The euro rose to a record high of 164.61 yen, from 164.27 in late New York yesterday. It was at $1.3508 to the dollar from $1.3489. The dollar bought 121.74 yen, from 121.77.

[R]5:30AM NY- 4:30PM Mumbai Sensex is higher Tuesday in mid-afternoon trading.[/R]

The Sensex on BSE is up 40 points, at 14,536 in mid-afternoon trade.

The market-breadth is slightly positive. For 1,245 which have advanced, 1,265 have declined and 82 are unchanged. The turnover on BSE was Rs 1,780 crore in mid-afternoon trade.

Advancers

SBI has advanced nearly 2% to Rs 1,432, and Reliance Energy has surged 1.6% to Rs 550. ICICI Bank and Bharti Airtel have gained around 1% to Rs 945 and Rs 836. Infosys also advanced over 1% to Rs 1,937.

Decliners

ITC leads the decliners, down 1.7% to Rs 162. Larsen & Toubro has lost 1.4% to Rs 1,943, and Gujarat Ambuja is off 1% at Rs 113.

Refining companies declined in early trading, after they reduced jet fuel prices by 1.9%, the first cut since February 2007. Hindustan Petroleum Corporation lost 1.95% to Rs 280, Indian Oil Corporation lost 0.25% to Rs 449 and Bharat Petroleum Corporation was off 1.16% to Rs 350.