Insurers, Banks Boost Europe

Ivaylo
20 Jun, 2007
New York City

European markets advanced for the first time in three days as a declining in borrowing costs in the U.S. and Europe buoyed insurers and banks. Advancers in mining and autos also offset weakness from retailers H&M and DSG International. The German DAX index rose 0.9% after striking a seven-year high of 8,104.39 early in the session. The French CAC-40 index advanced 0.5% and the U.K. FTSE 100 index climbed 0.5%.

[R]6:30AM European market gain Wednesday on strength in banking stocks, insurers.[/R]

European markets advanced on Wednesday morning. The German DAX index rose 0.9% to 8,100,66 after striking a seven-year high of 8,104.39 early in the session, while the French CAC-40 index advanced 0.5% to 6,099.46. The U.K. FTSE 100 index climbed 0.5% to 6,682.50. National benchmarks advanced in all of the 17 western European markets that were open.

Advancers

Car maker Renault gained %, while Allianz of Germany advanced 2.6%. HSBC gained 1.1 %. Lower bond yields increase the value of debt owned by insurers and banks. Clariant, the world''s second-largest maker of specialty chemicals, climbed 2.2%
Misys, a U.K. provider of software for banks and hospitals, rose 3% after the company reported fiscal 2007 earnings and margins topping estimates..

Decliners

Swedish clothing chain H&M slipped 4% after it reported that second-quarter sales and profits just missed expectations. Still, the shares have been trading strongly in the past few years and touched a 10- year high in April.

DSG International, the operator of electronics retailers under the PC World and Currys names, announced annual adjusted profit before tax dropped 5% to 295.1 million pounds, in line with estimates the company gave in May, while sales rose 14% to 7.93 billion pounds.

Commodities

Oil prices declined Wednesday on caution that a U.S. fuel supplies report due later in the session will show increases in oil product inventories but a fall in crude oil stocks. Crude oil for July delivery, which expires later Wednesday, lost 15 cents to $68.95 a barrel in electronic trading on the New York Mercantile Exchange.

Gold fell for the first time in a week as a decline in the price of oil diminished the appeal of the precious metal. Gold declined $1.80, or 0.3%, to $659.65 an ounce, the first drop since June 12. Silver fell 3 cents, or 0.2%, to $13.31 an ounce.

Currencies

The euro traded higher against the U.S. dollar on Wednesday despite a new report that showed producer prices in Germany advanced last month. In morning European trading, the euro bought $1.3423, up from $1.3406 in New York late Tuesday. The Japanese yen fell to 123.23 yen from its level Tuesday of 123.35 yen. The British pound edged lower to $1.9878 from $1.9879 on Monday.

[R]5:30AM Gold and silver advance Tuesday while grain tumbled.[/R]

Gold for August delivery rose $4.40 to finish at $664.30 an ounce on the New York Mercantile Exchange. August silver rose 11.5 cents to end at $13.325 an ounce, and July platinum slipped $1.00 to end at $1,298.00 an ounce. On the Nymex, July copper futures fell 1.7 cent to finish at $3.4010 a pound.

Crude oil prices gained slightly to a new nine-month high on strike threats in Nigeria and Brazil. The energy markets were also awaiting weekly oil inventory data on Wednesday, which the market expects to show little improvement in U.S. gasoline supplies. Crude oil futures for July delivery rose a penny to settle at $69.10 a barrel. July gasoline futures fell 2.97 cents to settle at $2.2346 a gallon. July natural gas futures fell 17.1 cents to settle at $7.519 per 1,000 cubic feet.

Grain prices plunged on the Chicago Board of Trade on improving weather conditions which convinced traders to take profits after last week strong buying. July wheat futures fell 20 cents to finish at $5.81 a bushel on the CBOT. July corn dipped 20 cents to end at $3.96 a bushel, and July soybeans shed 26.25 cents to end at $8.29 a bushel.