Europe Buoyed By Financials

Ivaylo
16 Jul, 2007
New York City

European markets rose on Monday led by financial stocks as Royal Bank of Scotland Group impoved its 71.1 billion-euro offer for the Dutch lender ABN Amro, trying to outbid Barclays. BT increased on broker comment, while Dutch company Philips retreated after its second-quarter net income and sales just missed analyst forecasts. Around the regions, the U.K. FTSE 100 index rose less than 0.1%, the German DAX 30 index climbed 0.1% while the French CAC-40 index gained 0.1%.

[R]6:30AM European shares gain Monday on a sweetened offer by Royal Bank of Scotland for ABN Amro.[/R]

National benchmarks climbed in 12 of the 17 western European markets that were open. The U.K. FTSE 100 index rose less than 0.1% to trade at 6,718.50, the German DAX 30 index climbed 0.1% at 8,099.60 while the French CAC-40 index gained 0.1% at 6,122.46.

In focus

ABN Amro, the Dutch lender, rallied 3.8% after Royal Bank of Scotland, the second-largest bank in the U.K., improved its offer for ABN Amro, in an attempt to outbid Barclays in the world biggest banking takeover. Dutch conglomerate Philips Electronics lost 1.5% after its second-quarter net income and sales missed analyst forecasts.

Around Europe

In London, financials were strong as Barclays rose 1.3% and Royal Bank of Scotland added 0.2%. BT increased 1.4% after Merrill Lynch hiked its recommendation for the U.K. largest phone company to buy from sell. Also in broker news, GlaxoSmithKline gained 1.6% as the world second-largest drugmaker was upped to neutral from underweight at JPMorgan.

In Frankfurt, the chief gainers were Deutsche Bank and insurer Allianz. Volkswagen climbed after the carmaker announced it expects to boost sales in China. Deutsche Bank advanced 1.2%. Reportedly, the largest bank in Germany may bid for Abbey Life, the closed life-insurance business of Lloyds TSB Group. Allianz gained 1.1% and Volkswagen added 0.8%.

Also in Germany BASF, the German chemicals group, rose 1.4% as UBS raised its price target on the group while Schneider Electric, also weak of late, rallied 2.4% as Citigroup lifted its recommendation from hold to buy.

In Paris, L’Oreal lost 3.9% as growth in sales at the cosmetics and beauty group failed to impress the market. Also in the news, EADS, struggling with losses caused by the Airbus division A380 plane delays, named Louis Gallois as sole chief executive officer. Total, the largest oil refiner in Europe, announced profit from converting crude oil into gasoline, diesel and other products increased 12% in the second quarter from a year earlier.

Currencies

The U.S. dollar was lower against other major currencies in European trading Friday morning. The euro traded at $1.3797, up from $1.3789 late Friday. The British pound traded at $2.0392, up from $2.0336. The dollar bought 121.61 Japanese yen, down from 122.03.

Gold traded in London at $667.25 per troy ounce, up from $665.30 late Friday.

Brent crude oil traded above $78 a barrel in London for the first time since Aug. 9 as field maintenance limited North Sea supplies.

Crude oil in New York for August delivery gained 51 cents, or 0.7%, to $74.44 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

[R]5:30AM Gold dips, copper advances, oil finishes higher, corn ends higher.[/R]

August gold lost $1 to end at $667.30 an ounce on the Nymex, while September silver dipped 7 cents to $13.11 an ounce.

Copper advanced nearly 1% on the LME and added 1.2 cents to finish at $3.593 a pound on the New York Mercantile Exchange.

Nymex crude oil, which has ended 10 straight trading sessions above $70 a barrel, gained $1.43 to close at $73.93 a barrel after briefly hitting $74.

Hopes for continuing builds in gasoline inventories weighed pressure futures down 4.15 cents to end at $2.2248 a gallon.

In Chicago, agriculture futures oscillated throughout the day. December corn gained 3.25 cents to $3.685 a bushel, while November soybeans advanced 7.25 cents a bushel to $9.4875.

Wheat futures closed down 0.75 cent to $6.2075.