1:00PM NY, 5:00 PM Frankfurt European markets gained ground, boosted by U.S. rate-cut optimism and strong property and oil stocks.
European stock markets finished notably higher Tuesday, gaining ground after recent decline on hopes for U.S. interest-rate cuts as well as continuous strength in the tech sector. Across the region, the U.K. surged 2.4%, France climbed 1.7% and Germany rose 1.1%.
In Frankfurt the upward move was led by Merck KGaA, with the drug maker rising 5.9% after it said a Phase III study of Erbitux with chemotherapy improved survival in patients with advanced non-small-cell lung cancer. Among other notable advancers, MAN AG rose 1.3% on increased demand for its vehicles increased. Porsche jumped 3.3% after the carmaker said it had higher sales in fiscal 2006-2007. DaimlerChrysler shares gained 1%. Stock-exchange operator Deutsche Boerse also contributed to the overall strength, moving up 3%.
In Paris oil companies moved significantly higher, benefiting from rallying crude oil price. Oil refiner Total gained 1.5%, while CGGVeritas, the world''s biggest surveyor of oil and natural-gas fields, jumped 2.7%. Among metals stocks, Vallourec, a maker of steel tubes to carry oil and gas, climbed 4.2%. Elsewhere, Alstom jumped 6.5% on deal speculations with Areva whose shares added 2.6%.
In London property companies British Land and Land Securities paced gains, both of them rising over 3% each. Shares of Barclays climbed 4.7% on optimism of better chances of acquiring Dutch bank ABN Amro. Hedge-fund manager Man Group also provided support with a gain of over 3%. Among commodities stocks, BHP Billiton and Rio Tinto Group led mining shares higher, moving up about 4% each. Oil and natural-gas giant BG Group climbed 3.4%, while Royal Dutch Shell added 1.3%. Elsewhere, U.K. clothing chain Next advanced 4.3% after it reported a stronger-than-forecast 11% rise in pretax profit in the first half.
11:30AM U.S. market averages sustained early gains on rate-cut optimism.
U.S. stock futures continued to post solid gains, boosted by interest rate optimism, as Fed Reserve Chairman Ben Bernanke gave no clues about possible rate cuts next week. In his speech before the German central bank, Bernanke pointed out the need for international cooperation toward economic stability.
The Nasdaq was boosted by strength in the biotechnology sector after drug makers ImClone Systems (
IMCL: chart) and Bristol-Myers Squibb (
BMY: chart) said their drug Erbitux improved the survival rate of lung cancer patients.
ImClone shares traded up 21% in late morning trade.
Various other sectors showed strong upward moves, with considerable strength in the steel, wireless, computer hardware, and financial sectors. In the disk drive sector, Western Digital (
WDC: chart) rose 5.5% after raising its Q1 earnings and revenue forecast.
Countrywide Financial (
CFC: chart) attracted attention again, as the U.S. largest mortgage lender entered talks to negotiate another multi-billion investment. McDonald''s (
MCD: chart) helped to lead the Dow higher with a gain of 4.3% on the back of higher same-store sales for August.
Crude oil rose 4 cents to $77.53 a barrel. The dollar weakened vs. the euro and British pound, while gold advanced. The Dow Jones rose 103.24, or 0.79%, to 13,231.09. The S&P''s 500 index rose 9.93, or 0.68%, to 1,461.63, while the Nasdaq rose 20.64, or 0.81%, to 2,579.75. Bonds fell as investors withdrew money to buy stocks, pushing the 10-year Treasury note''s yield up to 4.33% from 4.27% late Monday.
10:00AM New York - 7:30PM Mumbai – Power Ministry is looking for ways to allow utilities companies to borrow in the international markets. Motilal Oswal IPO jumped 19%.
Sensex in Mumbai trading lost 54 or 0.35% to close at 15,542.77. CNX Nifty fell 10.8 or 0.24% to close at 4,497.05. Rupee recovered to 40.60 against dollar from 40.65 in Friday trading.
Of the stocks trading on BSE, 1,410 gained, 1,356 declined, and 65 closed unchanged. Daily turnover on the exchange declined to 4,935 crore rupees from 4,070 crore rupees in Monday’s trading. In trading on National Stock Exchange volume declined to 10,856 crore rupees from 8,908 crore rupees a day ago.
Of the 30 stocks in the Sensex, 20 fell and 10 gained. Wipro led the decliners in the index with a fall of 2.4%.
Jindal Steel & Power soared 5% to 4,150 rupees after the Bolivian senate approved the deal between the country’s government and Jindal to develop iron ore mine and build steel plant. Jindal has said to invest $2.3 billion in the project over the next ten years.
Rallies India jumped 3% to 325 rupees after the news that it is exploring a deal to purchase Arysta LifeScience Corp from private equity company Olympus Capital. The other bidder, United Phosphorus added 1.8% to 345 rupees. Four international companies in addition to two India companies are bidding for the Japanese company. The life science and crop protection company is valued at $2 billion or nearly 9,000 crore rupees.
Blue Dart Express increased 2.5% to 622 rupees on the news that it plans to spend 1,000 crore rupees to expand its fleet of aircraft, material handling equipment, and ground handling facilities.
Auto makers declined after a steep rise in the last week of trading. Maruti Suzuki led the decliners with a loss of 2% to 859 rupees followed by 1.5% loss in Tata Motors to 691 rupees. Mahindra & Mahindra fell 0.7% to 696 rupees.
