European Markets Surge at Mid-day

123jump.com Staff
31 Jul, 2007
New York City

European markets surged at half-time tracking the postive sentiment in New York close. Germant and UK led the market averages across the region. Top eleven markets jumped across the region. German unemployment fell more than expected. GlaxoSmithKline jumped 3% after U.S. FDA approved its drug for sale. Copper price and mining stocks are trading higher in London trading. Economic reports from Germany indicate that second quarter growth may match that in the first quarter.

[R]8:30AM New York, 1:30PM London – European market rebound on the strength in New York and Asia.[/R]

European markets resurged on a bounce back in averages in New York and firm markets in Asia. Averages across the region at mid-day traded near 1.75% gain. U.K. led the region with a gain of 2.2% followed by 2% rise in Germany, and 1.9% increase in France, Norway, and Switzerland. Spain, Italy, and Spain advanced 1.7%. Top eleven markets in the region are trading higher.

In London trading, Takeover speculation and earnings reports lifted the averages. Alliance & Leicester jumped 2% after market analysts speculated that the National Australia Bank is likely to bid for the UK bank. Earnings news from Lloyds TSB lifted the stock 3%. The company reported earnings of 1.54 billion pounds in earnings from 1.24 billion pounds a year ago. GlaxoSmithKline jumped 3% after the U.S. FDA panel recommended its drug pill Avandia. Mining stocks got a lift on the rising copper and nickel prices in London trading. Copper prices gained on a news report that mine workers at Southern Copper Peru in Mexico have struck for higher wages.

In Frankfurt trading, stocks surged after the government reported that unemployment in July fell to 3.77 million. The marginal decline of 45,000, on a normalize basis, higher then estimated by economists. A week ago a private association of banks estimated second quarter economic growth of 0.5% matching the growth if the first quarter. MAN jumped 5% after reporting second quarter earnings increase of two-fold on sales gain in Eastern European nations. Commerzbank jumped 4%, Deutsche Bank increased 1% and Allianz edged 0.9% higher. Deutsche Boerse jumped 1.5% ahead of earnings before the market close.


[R]7:00AM New York, 8:00PM Tokyo – Earnings results drive market sentiment in Tokyo trading.[/R]

Nikkei 225 dropped 0.23% or 40.41 to close at 17,249.89 finishing the moth with a loss of 5%. A day after election market switched its focus to local earnings and regional trends. The positive close in New York helped averages in the morning hours.

June unemployment fell to 3.7% from 3.8% in May and total monthly wages fell 1.1% from a year ago. The report also showed that available jobs to the number of applicants ratio increased to 1.07 from 1.06 in May. In a separate report, the government also reported that the overall household spending in the month gained 0.1%, lower than expected rise of 0.7%. Last week, the government reported that June retail sales fell 0.4% and supermarket sales keep declining for 18 consecutive months.

Gainers

Nikon surged 5.5% ahead of earnings report. The company reported after the close first quarter earnings rise of 59% and net revenue gain of 29.4%. The company reported net revenue of 223.54 billion yen and earnings of 2.34 billion yen. For the year company guided revenue gain of 13% and 15.3% in the first half of the year. The earnings are expected to rise 33.7% and 13.1% in the similar periods.

Earnings News

Shinsei Bank reported earnings rise of 63% to 31.2 billion yen.

Olympus jumped 6% to 4,910 yen after reporting earnings 17.6 billion from 7.12 billion yen from a year ago. The company reported net sales increase of 17.2% to 264 billion yen from 225.4 billion yen from a year ago. The earnings gained 147.4% to 17.6 billion yen from 7.12 billion yen fro a year ago.

Mitsubishi Corp gained 5% to 3,540 after it reported first quarter earnings. The company net revenue increased to 5.46 trillion of yen from 4.877 trillion yen and earnings declined to 115 billion yen from124 billion yen. The revenue jumped 12% and gross profit increased 1.8% but net profit declined 8% on lower sales price in Australian coking coal business.

Decliners

Mitsubishi Heavy Industries declined 4% to 843 yen after reporting first quarter earnings of 17 billion yen from 9.2 billion yen a year ago. The net sales in the first quarter increased to 685 billion yen, up 17.1% from 585.5 billion yen. The net income and earnings per share jumped 83.6%. For the fiscal year 2007 ending in March 2008 company guided revenue of 3.1 trillion and net income of 54 billion.

Nippon Steel, Sumitomo Metals, JFE Holdings said that the companies are investigated for a possible price fixing violations.