Markets & Finance

Europe, Asia Close Higher


European stock markets were higher on Wednesday. In London, the Financial Times Stock Exchange 100 gained 4.50 points, or 0.09%, to close at 4947.40. The FTSE closed flat as gains from the banks and mining sectors were offset by weak oil stocks: BP and Shell shed 0.53% and 0.41% respectively. WTI continues to trade below $56 per barrel after EIA data showed a rise in crude stocks. The mining sector provided a boost after Morgan Stanley said commodity prices are set to remain high, and raised its targets for Rio Tinto and BHP Billiton. Beverage firms remained in focus after U.S. group Anheuser-Busch said first-quarter beer volumes were down. Allied Domecq was the subject of a raft of broker changes after yesterday's huge share price rise. British Airways and Carnival gained from the lower oil price. In pharma, AstraZeneca extended yesterday's gains following Pfizer's outlook statement.

Germany's Dax gained 16.57 points, or 0.38%, to close at 4379.18. Frankfurt ended Wednesday's session with modest gains amid receding oil prices after favourable inventories data. Of local note, at DaimlerChrysler's CEO Schrempp reiterated profits will be slightly higher than last year's after costs associated with restructuring Smart. The car maker also sees a turnaround at Mercedes in the second-half of the year, stating the medium-term goal is 10% profit for the unit. Separately, German new-car sales fell 1% in March. Munich Re's CEO said he is satisfied with developments in the first quarter and sees no major claims. Infineon gained on the read across from Merrill Lynch upgrading several U.S. semiconductor stocks to buy. Lufthansa's cargo unit's 2005 net profit was positive, improved and will grow. Elsewhere, Thyssen eased after Morgan Stanley downgraded the steel sector to cautious from in-line, while the Financial Times sees signs the steel market is weakening. SAP remained weak following U.S. peer Siebel's sales warning last night.

In France, the CAC 40 gained 19.05 points, or 0.47%, to close at 4106.99. The CAC40 ended higher on Wednesday, breaching the 4,100 level, as Wall Street took firm strides in early trading. Equities were buoyed by cooler crude futures, which trade below the $56 per barrel mark, after the U.S. Department of Energy released in-line crude inventories data. Aluminium maker Alcoa is set to kick off the earnings reporting period, after the closing bell. Of local note, Pernod extended gains on expectations it will launch a joint bid with U.S. Fortune Brands for Allied Domecq. Lehman Brothers reckons Allied could command up to 7.00 pounds per share. Total edged lower as WTI crude futures slip. Arcelor was knocked as signs of weakness in the steel market were highlighted by Morgan Stanley's move to downgrade its steel industry view to cautious from in-line following a 16% average cut in 2006 industry earnings per share and ABN Amro initiated coverage with reduce. France Telecom dipped as Telecom Italia bought Tiscali's stake in Liberty Surf and intends to grow the latter's market share in France.

Asian markets were higher on Wednesday. Japan's Nikkei 225 rose 52.85 points, or 0.45%, to close at 11,827.16, nudged up by a retreat in oil prices. May WTI crude oil fell 97 cents to $56.04 overnight following Fed Chairman Greenspan's comment that market forces would work out the markets supply and demand problems. The strength in the dollar against the yen continued to boost exporters, with Canon Inc. up over 1% while Sony Corp added nearly 1%. Nintendo shares surged ahead of an expected dividend increase while Chugai Pharmaceutical gained after it raised its profit estimate for the six months ending June 30 due to higher sales of Tamiflu influenza medicine. Net profit for the period is now projected at 23 billion yen on sales of 154 billion yen. Aeon Co., Asia's number one retailer by sales, declined on weak 2004/2005 results.

Hong Kong's Hang Seng Index gained 48.85 points, or 0.36%, to close at 13,562.26, with industrials and property names edging higher. Electricity stocks such as China Resources surged on hopes of higher tariff once Beijing introduces new rules that allows linking fuel costs with power prices. China Unicom jumped on market talk that Chinese regulators are reviewing plans to merge its GSM cellular network with China Netcom.

Canada's benchmark TSX/S&P gained 49.94 points, or 0.52%, to close at 9,669.01.


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