Europe Higher on Banks, Oil

Ivaylo
15 Jun, 2007
New York City

European stocks were higher Friday with banks and oil groups leading the advance. EADS is also higher on government support and after a Qatar fund bought shares in J Sainsbury. As crude oil remained above $70 a barrel, oil stocks gained. In late morning trade, Frankfurt Xetra Dax added 0.6%, the CAC 40 in Paris climbed 0.4% and London FTSE 100 rose 0.6%.

[R]6:30AM European markets advance Friday on oil and banking stocks.[/R]

European markets rose in all 17 markets in western Europe that were open except for Denmark and Luxembourg. In late morning trade, Frankfurt Xetra Dax added 0.6% to 7,892.04, the CAC 40 in Paris climbed 0.4% to 6,073.87 and London FTSE 100 rose 0.6% to 6,687.8.

Advancers

EADS, the European aerospace group, rose 4.4% after Francois Fillon, France’s prime minister, announced that the company was strategic for France, denied any ideas of nationalising the company.

Commerzbank was up 2.3% after the prospect of a capital increase diminished after the city of Berlin government stated it was selling its 81% stake in Landesbank Berlin to DSGV, the public-sector savings bank, for 4.622 billion euros.

Hypo Real Estate, the German property lender gained 2.7% after Morgan Stanley raised its price target on the stock, keeping its rating at overweight.

Oil companies also helped boost the markets as crude prices remained above $70 a barrel. Total added 1.1%, Repsol gained 1.3% and OMV climbed 1.3%.

Shares of Sainsbury climbed 5%. A Qatar- backed investment fund acquired 7.1% of the company''s stock, raising its stake in the supermarket chain to 25%.

Decliners

RWE, the second-largest utility in Germany, fell 0.1% after Goldman Sachs put a sell rating on the stock.

Commodities

Oil prices were little changed Friday after rising overnight to a nine-month-high finish on worries the U.S. refining industry will not meet peak summer gasoline demand. Crude oil for July delivery was down 10 cents at $67.55 a barrel on the New York Mercantile Exchange. Gold opened Friday at a bid price of $650.70 a troy ounce, down from $650.90 late Thursday.

Currencies

The U.S. dollar was mostly lower against other major currencies in European trading Friday morning. The euro traded at $1.3310, up from $1.3307 late Thursday in New York. The British pound traded at $1.9703, up from $1.9694. The dollar bought 123.43 Japanese yen, up from 122.97.

[R]5:00AM Gold and silver advance Thursday on U.S. economic data.[/R]

Gold for August delivery gained $3.20 to end at $655.90 an ounce on the New York Mercantile Exchange, while silver advanced 10.5 cents to settle at $13.165 an ounce. Overseas, the industrial metals market advanced, helped by the Fed''s Beige Book report, which showed the U.S. economy developed at a moderate rate in the first part of the second quarter.

Nickel surged nearly 5 % and copper gained more than 2 % before the close of the London Metal Exchange. Zinc, lead, aluminum and tin also advanced. On the Nymex, copper prices rose 7.95 cents to end at $3.3925 a pound.

Crude oil and gasoline prices continued to strengthen buoyed by the inventories report on Wednesday from the Energy Information Administration. Crude oil for July delivery increased $1.39 a barrel to settle at $67.65 on the Nymex. July gasoline futures rose 6.94 cents to close at $2.2247 a gallon.

On the Chicago Board of Trade, wheat prices rallied to a 10-year high on heavy rains in the Plains. July wheat futures climbed 17 cents to settle at $6.064 a bushel on the CBOT. Corn and soybean prices followed wheat, with July corn rising 5 cents to close at $4.094 a bushel and soybeans gaining $1.60 to end at $8.274 a bushel.