Barclays, Daimler Drive Europe Higher

Elena
03 Sep, 2007
New York City

European stock markets closed mostly higher Monday, led by strength in banking shares. Svenska Handelsbanken surged 7.8% after Storebrand agreed to buy the Swedish bank''s SPP life-insurance unit for $2.6 billion. Barclays was another leading gainer after it said losses from failed debt funds will not exceed 75 million pounds. Across the region, the U.K. finished up 0.2%, Germany advanced 0.14%, while France came under a bit of pressure, falling 0.2%

[R]1:00PM NY, 5:00 PM Frankfurt European markets closed mostly higher, led by banking stocks.[/R]

European stock markets closed mostly higher Monday, led by strength in banking shares. Svenska Handelsbanken surged 7.8% after Storebrand, Norway''s largest publicly traded insurer, agreed to buy the Swedish bank''s SPP life-insurance unit for $2.6 billion. Barclays was another leading gainer after it said losses from failed debt funds will not exceed 75 million pounds. Market sentiment was also boosted by a 90-billion-euro merger deal of two French utility companies. Across the region, the U.K. finished up 0.2%, Germany advanced 0.14%, while France came under a bit of pressure, falling 0.2%

In Frankfurt stocks advanced, with auto makers in the lead. DaimlerChrysler rose 2.7% after Deutsche Bank raised its price estimate for the shares the luxury car maker to 100 euros from 86 euros. The broker believes that after the separation of Chrysler, Daimler will manage to further boost margins. Bayerische Motoren Werke added 1% after the maker of luxury cars posted 10% increase in sales last month. On the negative side, Metro fell 1.3% after JPMorgan downgraded the stock

In Paris stocks declined, weighed down by Gaz de France and Suez which reversed from early after announcing new terms for a merger deal. Gaz de France fell 2.69%, while Suez shares lost 3.31% amid concern that the merger is being driven by political rather than industrial considerations. Water company Veolia declined 2.4% on concern it may struggle to buy the water and waste-treatment assets spun off by Suez.

In London stocks gained for a fourth day in a row, led by Barclays and ICAP. Barclays gained 4% after it said losses from failed debt funds will come no more than 75 million pounds. The bank also appealed to central banks to help restore confidence in financial markets. ICAP, broker of transactions between banks, rose 2.7% after Morgan Stanley upgraded its stock. In deal news, banking giant HSBC Holdings agreed to buy a majority stake of 51.02% in Korea Exchange Bank for $6.3 billion in cash from a holding company owned by Lone Star.