Markets & Finance

Europe Closes Higher


European stock markets were higher Wednesday. In London, the Financial Times Stock Exchange 100 gained 14.60 points, or 0.30%, to close at 4960.80. UK stocks closed on positive ground though off day's highs as Wall Street trades lower, hit by weak March retail data. Early gainers Hanson and Sage continued to provide support while a drop in crude prices hurt oil stocks. WTI now trades at $50.60 per barrel following U.S. oil inventory data: BP and Shell lost 1.53% and 0.92%, respectively. The mining sector also struggled with BHP Billiton after its agreed 71.5% rise in iron ore prices overnight was seen as disappointing. continued in the spotlight as Burberry said second-half total underlying revenues increased by 6% while it expects minimum fiscal EBITA of 162 million pounds, ahead of forecasts. Tobacco stocks gained after an upbeat broker note. Tesco gained from a string of positive broker comments after yesterday's results. Elan jumped on news a trial showed its suspended MS drug Tysabri slowe the spread of disability in patients.

In Germany, the Dax gained 33.57 points, or 0.77%, to close at 4405.69. Frankfurt closed near session highs, helped by a weaker tone to oil prices and optimism the U.S. Federal reserve will maintain its measured interest rate policy. Today, U.S. retail sales disappoint the market after only rising 0.3%, vs. a 0.8% forecast, easing concerns the Fed may have ratcheted up the tempo of its interest rate policy. Shares making headlines included Tui and Lufthansa, which benefited from lower oil and good travel numbers from Fraport. Utilities E.ON and RWE gained on hopes of a relaxation of German regulations governing the market and rising wholesale market for electricity prices. Deutsche Post rose after its DHL unit said demand for worldwide air cargo probably will grow 6% a year through 2010. New car registrations in Europe for March showed DaimlerChrysler sales fell 2.6% with Mercedes sales down 5.7% although Smart sales rose 35.2%. VW group sales fell 2.1%, while BMW's group sales climbed 7.5%. BASF dipped after a downgrade from Merrill Lynch. Siemens' bid for Silovye Mashiny was rejected by Russian anti-trust authorities.

France's CAC 40 gained 20.04 points, or 0.49%, to close at 4116.85. The CAC40 ended higher thanks to an extended correction in crude oil futures and a positive view on figures released by Carrefour and buyback news at Arcelor. However, Paris did come off highs in late trade as Wall Street traded lower. The DJIA was down 0.1% and the Nasdaq was 0.5% off on weaker U.S. retail sales data and a disappointing chips report. At home, Carrefour reported better-than-expected first-quarter pro-forma sales, excluding foreign exchange, up 4.8% (+5.2% including foreign exchange) to 19.59 billion euro, thanks to growth in Asia and LatAm. However, French sales growth of 0.9% to 9.39 billion euro was lower than forecast. St. Gobain sustained some morning gains as news of a plan to compensate asbestos victims gained momentum in the U.S. Senate yesterday after a key Democrat signalled his support. Autos were lower as March registrations at Renault were down 6.7% year-over-year in the EU15 and EFTA region, underperforming the broader market.

Asian markets were mixed Wednesday. In Japan, the Nikkei 225 lost 32.78 points, or 0.28%, to close at 11,637.52. It was the third day down for Japanese stocks after a government report showed producer prices rose for a 13th month in March. Retailers led the fall. Takashimaya predicted profit and sales would decline in the first-half of the year. Kanebo said it would restate full-year profits as losses from 2000 to 2003 because former management inflated sales and understated expenses. Ito-Yokado fell 1.2%, Isetan lost 1.6% and Mitsukoshi dropped 4.2%. Livedoor jumped on speculation it may be able to force Fuji Television Network into an alliance. Also, Nihon Keizai newspaper reported the Livedoor will offer to sell its entire stake in Nippon Broadcasting for 6,500 yen a share. Japan Tobacco's Russian subsidiary won a court battle in a case against the Russian government's claim that the company owes $79 million yen in unpaid taxes from 2001. Japan Tobacco soared 2.4%. Exporters rose after minutes from a Federal Reserve meeting eased concerns that interest rates will accelerate. Advantest rose 1.1%, Sharp gained 1.1% and Kyocera advanced 0.8%.

In Hong Kong, the Hang Seng Index rose 141.57 points, or 1%, to 13,799.62 on Wednesday. Of the 33 HSI constituents, 29 gained and only one declined. Top HSI percentage gainers were Denway Motors, PCCW, and CKI Holdings. Guangzhou Honda, the Denway Motors and Honda Motor JV, said it sold 22,008 cars in March, up 60% YoY. Guangzhou Honda puts its yearly sales target at 230,000 cars this year, up 14% from 2004. S&P Equity Research says Denway remains a strong buy. Wednesday's laggard was COSCO Pacific.

Canada's benchmark TSX/S&P gained 129.39 points, or 1.34%, to close at 9,499.63.


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