Euro markets close higher

Tue, 29 Apr 2008

European stock exchanges closed generally higher on Monday, helped along by a positive start to the day on Wall Street and news of weaker German inflation in April.

In London the FTSE 100 index was stable, slipping 0.02 percent to finish at 6090.40. In Paris the Cac 40 climbed 0.69 percent to reach 5012.75 while in Frankfurt the Dax added 0.42 percent to end the day at 6925.33.

The Euro Stoxx 50 index of leading eurozone shares gained 0.54 percent to end the day at 3814.76.

Wall Street shares were in positive territory by mid-day, as investors awaited the outcome of a Federal Reserve meeting and key data on the US economy.

The market digested a $23-billion takeover unveiled for chewing gum giant Wrigley and a big investment in Ford Motor Company, which sparked some early buying interest.

The Dow was up 0.16 to 12 912.87 while the Nasdaq composite rose 0.23 percent to 2428.41.

The market action came as billionaire Kirk Kerkorian said he had built a 4.7 percent stake in Ford Motor Company and was seeking another one percent, adding that the troubled automaker is making "meaningful traction in its turnaround efforts."

Meanwhile US candy giant Mars announced plans with Warren Buffett's Berkshire Hathaway to buy chewing gum maker Wrigley for some $23-billion, a large premium to its closing price on Friday.

Al Goldman at Wachovia Securities said the market was still maintaining momentum from the past two weeks while awaiting the outcome of this week's Federal Reserve's Federal Open Market Committee meeting and key economic reports.

Most economists expect the central bank to trim its federal funds rate by a quarter-point to 2.0 percent and signal a willingness to pause to assess the impact of hefty cuts since last September.

In Europe sentiment was also bolstered by news that German consumer prices had fallen in April from March and that annual inflation in the largest eurozone economy had declined to 2.4 percent from 3.1 percent in March.

In London confectioner Cadbury rose 2.75 percent to 579 pence, bolstered by news of Mars' acquistion of Wrigley in the United States.

Higher oil prices powered gains of 3.20 percent to 2999 pence by Cairns Energy. But BP fell 0.26 percent to 578.50 pence and Shell 0.16 percent to 1923 pence ahead of the publication on Tuesday of their quarterly results.

In Paris banks were well supported on news that Deutsche Bank, the biggest German bank, was planning a capital increase to raise up to €4.0-billion.

Credit Agricole was up 1.73 percent at 21.70 euros while BNP Paribas added 0.83 percent to close at 69.76 euros.

AirFrance-KLM, usually vulnerable to rising oil prices, managed to resist the surge in crude rates on Monday, gaining 0.05 percent to 19.27 euros.

In Frankfurt the auto sector was in favor, with BMW rising 0.43 percent to 35.17 euros and Daimler 1.46 percent to 50.88 euros.

Deutsche Bank took on 0.76 percent to close at 76.77 euros on reports of its capital increase. Elsewhere in the sector Hypo Real Esate added 1.95 percent to finish at 24.01 euros while Commerzbank rose 2.23 percent to 23.81 euros.

Elsewhere in Europe there were gains of 0.76 percent to 13 877.8 on the Ibex-35 in Madrid, 0.93 percent to 472.20 on the AEX in Amsterdam, 0.54 percent to 7550.14 on the Swiss Market Index and 1.27 percent to 3941.33 on the Bel-20 in Brussels.

In Milan the SP/Mib fell 0.19 percent to 33 948.

In Asia on Monday, Japanese share prices ended slightly higher on easing worries about tight credit and corporate earnings, dealers said.

Tokyo's benchmark Nikkei-225 index rose 0.22 percent to 13 894.37 points. Hong Kong's key Hang Seng index was up 0.6 percent at 25 666.29 points.