Europe Boosted by M&A, Miners

Ivaylo
11 Jun, 2007
New York City

European markets gained on Monday morning after the declines last week, with investors buying in airline stocks as crude-oil futures plunged and with possible acquisition in the gas sector putting the U.K. gas company Centrica to the fore. Support also came from the strong close on U.S. markets on Friday. The German DAX Xetra 30 index gained 0.9%, the French CAC-40 index added 0.8% and the U.K. FTSE 100 index advanced 0.5%.

[R]6:30AM European markets advance Monday with bid talks about Centrica in focus.[/R]

European markets gained on Monday. By mid-day, the German DAX Xetra 30 index gained 0.9% at 7,657.99, the French CAC-40 index added 0.8% at 5,932.58 and the U.K. FTSE 100 index advanced 0.5% at 6,534.90. National benchmarks advanced in all 17 western European markets that were open.

Advancers

Gas group Centrica surged 4.4% after a report that Gazprom deputy chief executive, Alexander Medvedev, said at a St. Petersburg conference that there will be a deal announced during the Wimbledon tennis tournament to boost Gazprom presence in Britain.

BHP Billiton Ltd. led advancers in the mining sector after UBS AG said mergers and acquisitions in the industry will continue to speed up. BHP Billiton rose 0.6%. UBS raised its price estimate for shares of the world biggest mining company. Rio Tinto Group, the third-biggest mining company, climbed 1.3%.

ThyssenKrupp AG gained 4%. The world biggest stainless steelmaker is interested in either U.S. Steel Corp. or Russian Severstal to expand.

Barclays, the London-based bank striving to acquire ABN Amro in the biggest financial-services takeover, rose 2.5% after reports yesterday that hedge fund Atticus Capital acquired shares of Barclays and met with the London-based bank to discuss withdrawing from the deal.

Decliners

Rexam dropped 3.2%. The maker of packaging for companies including Givenchy and L'Oreal SA announced it will acquire the plastics unit of Owens-Illinois for $1.83 billion.

Telelogic, software design systems company, dropped 0.5%. International Business Machines Corp., the world largest computer-services provider, agreed to acquire the Malmoe, Sweden-based company for $743 million.

Commodities

Crude oil traded little changed, below $65 a barrel in New York, on expectations U.S. gasoline supplies will rise and increasing interest rates will slow demand for commodities. Crude oil for July delivery was trading at $64.92 a barrel, up 16 cents, in after-hours electronic trading on the New York Mercantile Exchange. Gasoline for July delivery rose 1.49 cents, or 0.7%, to $2.142 a gallon in New York. Brent crude for July settlement was at $68.58 a barrel, down 2 cents, on the ICE Futures exchange.

Gold for immediate delivery rose 0.5% to $651.89 an ounce, and traded at $651.85. Silver for immediate delivery climbed 5 cents, or 0.4%, to $13.15 an ounce.

Currencies

The dollar gained on the euro again Monday as doubts that the U.S. Federal Reserve will reduce interest rates continue. The euro bought $1.3347 in morning European trading, down from $1.3373 in New York late Friday. The British pound declined to $1.9666 from $1.9700. The dollar was marginally lower against the Japanese yen, slipping to 121.61 yen from 121.70 yen.

[R]5:30AM – 4:30PM Mumbai Sensex advances 170 points in mid-afternoon trade on Monday.[/R]

The Sensex on BSE is about 170 points higher in mid-afternoon trading.

The market-breadth is strong as 1,509 have advanced, 912 have declined and 100 are unchanged.

Economic news

The rupee advanced again versus the U.S. dollar on Monday on capital inflows. In early trade on Monday the dollar bought 40.9850, up from 41.1150 per dollar on Friday.

Property developer DLF Ltd sold its institutional part of its IPO for $2.4 billion withing an hour on Monday.

Advancers

HDFC has 3.5% to Rs 1,812. ITC and Hero Honda have surged 3% each to Rs 155 and Rs 701, respectively. IT stocks were in demand. Satyam Computers advanced 2.2% to Rs 505, Infosys was up 1.9% to Rs 1,987, Wipro gained 0.9% to Rs 552, and TCS gained 0.5% to Rs 1,226, edged higher. Hindalco and HDFC Bank have rallied 2.3% each to Rs 161 and Rs 1,117, respectively. Index heavy Reliance Industries advanced 1.8% to Rs 1,692.

Decliners

Auto stocks Tata Motors, 0.4% lower to Rs 651, and Maruti Udyog, declining 0.4% to Rs 734, lost after news that most auto companies were reducing production on weaker demand.