Europe Edges Higher on Upgrades

Ivaylo
12 Jun, 2007
New York City

Earlier in the session on Tuesday, banks weighed on sentiment after comments from Bank of England

[R]6:30AM European markets recover after early losses Tuesday on broker comment.[/R]

European markets were higher in late morning trading on Tuesday. In Germany, Frankfurt Xetra Dax added 0.3% to 7,729.35, the CAC 40 in Paris was flat at 5,937.96 and London FTSE 100 climbed 0.2% to 6,580.6.

Advancers

TeliaSonera, the biggest telecoms operator in the Nordic region, gained 4.6% after announcing Anders Igel, president and chief executive, would sted down at the end of July. The company also said that it was searching for a replacement to lead it through a new phase centered on growth, restructuring and value enhancement.

Austrian steel producer VoestAlpine climbed 4.3% as the sector continued to benefit from merger talk. Major shareholders in the company were reported to have been buying shares in Boehler-Uddeholm to help VoestAlpine boost its 54.6% stake, although this was denied. Credit Suisse upgraded its price target.

Lagardere, the French media group, gained 3.7% after Exane BNP hiked its recommendation on the stock from neutral to outperform.

Decliners

Banks weighed on the market after HBOS issued a warning that its share of the UK mortgage market were declining. The company fell 4.5%, while rival Northern Rock lost 3 % and Commerzbank of Germany dipped 1.6%.

Commodities

Crude oil for July delivery was at $66.06 barrel, up 9 cents, in after-hours trading on the New York Mercantile Exchange. Brent crude oil for July settlement shed 2 cents to $69.54 on the London-based ICE Futures exchange.

Gold traded in London at $652.80, up from $650.30 on Monday. Silver opened in London at $13.17, up from $13.11.

Currencies

The U.S. dollar was mostly higher against other major currencies in European trading Tuesday morning. The euro traded at $1.3347, down from $1.3359 late Monday in New York. The British pound traded at $1.9721, up from $1.9693. The dollar bought 121.78 Japanese yen, up from 121.77.

[R]5:30AM NY-4:30PM Mumbai Sensex is down in mid-afternoon Tuesday on interest rate fears.[/R]

The Sensex in BSE is 68 points lower at 14,015.

The market-breadth is very weak, as there are almost three decliners for every advancer. For 1,826 which have declined, 615 have advanced and 73 are unchanged.

Advancers

Cement shares were strong as ACC is the leading advancer, up 2% to Rs 780, while Gujarat Ambuja Cements gained 0.7% to Rs 109 and Madras Cement was up 1% to Rs 2,555. Cement shares advanced after the Cement Manufacturers Association reported sales gained 10.6% in the period up to May, 2007.

Index heavy Reliance Industries edged 0.35% higher to Rs 1,674. Larsen & Toubro gained 0.5% to Rs 1,900 on securing orders from Oil & Natural Gas Corporation and Steel Authority of India.

Decliners

IT stocks plunged as the rupee advanced against the dollar. Satyam has plunged over 4% to Rs 476. Wipro was down 1.5% to Rs 535 and TCS shed 0.9% to Rs 1,210. Reliance Communications has dipped nearly 3% to Rs 491, and Hindalco has shed 2.6% to Rs 157.

HDFC Bank, SBI and Maruti have lost around 2% each to Rs 1,078, Rs 1,314 and Rs 720, respectively.