Markets & Finance

Europe Higher, Asia Lower


European stock markets were higher on Friday. In London, the Financial Times-Stock Exchange 100 index rose 73.90 points to 5232.20 level as London recovered from terrorist bombings with a show of economic force. 95 FTSE stocks rose and 4 fell on turnover of 1,410,000,000 shares. Yields on 10-year gilts rose to 4.20% from 4.19% yesterday but down from 4.22% earlier. Sterling was off at $1.7340 on speculation the Bank of England might be forced to cut rates. August Brent crude oil futures rose on short covering before the weekend. Insurers Prudential and Friends Provident were higher in rebound from yesterday's losses on bombings fears. Exel rose on positive Deutsche Bank commentary. Morgan Crucible rose on bullish profits outlook. Peacock Group rose as company posted higher June sales.

In Germany, the Dax index gained 67.79 points to 4597.97 level as German May industrial production fall of 0.2% was less than the 0.5% expected. 30 DAX stocks rose, none fell on turnover of 93,498,825 shares. Yields on 10-year Bunds were unchanged at 3.18%, down from 3.19% earlier. The euro was steady at $1.1925. Commerzbank fell as CEO Klaus Peter Mueller confirmed report the bank is "interested in principle" in buying BHW Holding. Infineon, Europe's largest chipmaker, rose. Bayerische Motoren Werke rose after company said it sold 4% more vehicles in mainland China in first half vs year ago period. Stada Arzneimittel fell after UBS lowered its rating to "neutral" from "buy."

France's CAC 40, which lost 59 points yesterday, was up 60 points to 4280 level on short covering before weekend. The index is also seeing some bargain hunting from losses sparked yesterday by London bombings. 38 CAC stocks rose, 2 fell on turnover of 108,540,404 shares. Yields of 10-year bonds were flat at 3.18%. Gaz de France rose after company and state sold stake infirm for 4.5 billion euros. Total rose after company and Norway's Neste Oil Oyj agreed to build biodiesel plant. STMicroelectronics rose after Goldman Sachs raised its rating on stock to "outperform" from "in-line". Technip rose after winning 2 contracts from Norway's Statoil for subsea services.

Asian markets closed modestly lower on Friday. The recovery off session lows in European stocks and the rebound on Wall Street, in the wake of yesterday's terrorist attacks in London, bolstered Asian stocks against potentially deeper losses.

In Japan, the Nikkei 225 fell 24.15 points, or 0.21%, to 11,565.99. A weaker-than-expected report on May machinery orders hurt sentiment. The broad-based TOPIX index matched the Nikkei 225's 0.2% decline, settling at 1177.61. The market started off strong and then weakened in late trade. Breadth on the first section of the Tokyo Stock Exchange was 817-657 negative. Volume rose. Shares of domestic stock groups such as financials, retail and real estate were weak. Exporters in the automotive and electronics groups rose.

In Hong Kong, the Hang Seng fell 66.34 points, or 0.47%, to 13,964.47. The index opened with a firm tone much like Tokyo, but turned lower in the second hour of trading. Declining issues outnumbered advancers by 21 to 6. Volume fell. China Mobile, HSBC Holdings and CNOOC were the worst performers by index points.

Canada's benchmark TSX/S&P gained 51.71 points, or 0.51%, to close at 10,172.71.


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