Europe Breaks Losing Streak

Ivaylo
28 Jun, 2007
New York City

Alleviated fears over bonds yields supported most European markets higher Thursday. European advances tracked a strong session on U.S. markets on Wednesday. Higher commodity prices also buoyed energy and mining companies and as Citigroup Inc. stated shares in the region are cheap. The German DAX 30 index advanced 1% to trade, the French CAC-40 index advanced 0.9%, and the U.K. FTSE 100 index rose 0.7%.

[R]6:30AM European markets advance on energy and mining stocks.[/R]

European markets are higher on Thursday. The German DAX 30 index advanced 1% to trade at 7,880.13, the French CAC-40 index advanced 0.9% at 5,996.38, and the U.K. FTSE 100 index rose 0.7% at 6,571.80. National benchmarks increased in all of the 17 western European markets that were open.

Advancers

In Germany, the advances of more than 2% put sportswear group Adidas and truckmaker Man in the lead. In France, turbine maker Alstom and yogurt producer Danone rose 1.8% each and boosted the market. Nestle climbed 2.5% as Deutsche Bank raised its recommendation on the shares to buy from hold.

BP gained 1.9% and Statoil ASA, largest producer of oil and natural gas in Norway, rose 1.7%. Royal Dutch Shell also advanced 2.1%.

Miners were also strong as the price of copper gained. BHP Billiton climbed 1.6% and Rio Tinto Group, the world third-biggest mining company, added 1%.

Shares in Vodafone Group rose 2% after a report from Dutch technology magazine Bright that the firm is likely to supply Apple Inc iPhone in Europe, starting in December.

Decliners

Diageo slid 1.3% even as the world biggest liquor company announced revenue growth accelerated in the fiscal second half.

Commodities

Oil prices advanced Thursday tracking a U.S. government report that showed an unexpected drop in gasoline stocks. Crude oil for August delivery gained 24 cents to $69.21 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The Brent crude contract for August delivery gained 12 cents to $70.67 a barrel on the ICE Futures exchange in London.

Gold gained for a second day in London on speculation higher oil costs will revive demand for the metal. Gold for immediate delivery climbed $2.40, or 0.4%, to $645.90 an ounce. Silver increased 18.49 cents, or 1.5%, to $12.46 an ounce.

Currencies

The dollar fell against the euro Thursday as markets awaited the U.S. Federal Reserve interest rate decision. In morning European trading the euro bought $1.3462, up from $1.3445 in late New York trading on Wednesday. The British pound was at $2.0017, up from $1.9978 the night before, while the dollar rose to purchase 123.11 Japanese yen from 122.43 in New York.

[R]5:30AM Gold and silver retreated, while crude oil gained.[/R]

Crude oil for August delivery advanced $1.20 to settle at $68.97 on the New York Mercantile Exchange. The contract reached $69.21 during the session. Brent crude futures advanced 31 cents to settle at $70.53 on London ICE Futures exchange. Gasoline rose 0.77 cent to close at $2.2546 a barrel.

Gold for August delivery declined 50 cents to end at $644.80 an ounce on the Nymex on Wednesday, a day after prices reached their lowest level since mid-January. Silver also fell, with the July contract losing 7 cents to end at $12.21 an ounce. Copper prices edged higher on news that workers at the largest copper mine in Europe, KGHM in Poland, will vote on a potential strike. Nymex copper rose 4.35 cents to settle at $3.357 a pound.

In Chicago, corn prices rebounded on reports that rains have finally reached the parched eastern Corn Belt. Corn for July delivery shed 12.6 cents a bushel to settle at $3.436 on the Chicago Board of Trade. Wheat contract for July delivery retreated, ending down 2.4 cents to $6.06 a bushel. July soybeans shed 3.4 cents to end at $8.034 a bushel.