Stocks Slip Off Highs on Odds of Rate Rise EUROPE MARKETPLACE By Bloomberg
Posted on: Tuesday, 28 March 2006, 12:00 CST
By Adria Cimino
European stocks fell Monday from five-year highs as the prospect of higher interest rates appeared to threaten the market's merger- driven rally.
"Investors were switching from industry to industry to assign merger and speculation premiums, but raising funds for acquisitions is getting more expensive," said Franco Pozzoli, a fund manager at Rinascimento Sicav in Milan. "There may be bad surprises in terms of higher interest rates and slowing earnings."
The Stoxx 600 lost 2.63 points to 335.23 points. The index has added 8.1 percent so far this year. The Stoxx 50 dropped 32.76 points to 3,515.92 while the Euro Stoxx 50, an index for the 12 countries using the euro, slid 42.96 points to 3,827.93.
The FTSE 100 in Britain lost 64.10 points to 5,972.20, the DAX in Germany dropped 60.88 points to 5,912.26 and the CAC 40 in France declined 56.27 points to 5,162.44. Investors are looking to the meeting of Federal Reserve policy makers, which began Monday in the United States, for indications on future interest rate movements. Most economists expect a quarter-point increase Tuesday, to 4.75 percent, in the Fed's benchmark rate.
Meanwhile, a report on Monday showed that French business confidence declined in March, reflecting concern that mounting opposition to the government and higher borrowing costs could crimp an economic recovery.
*
Room for profit-taking
"The main question is, are markets going to keep up with these high levels or is there going to be a consolidation?" said Jean-Luc Allain, a fund manager at Trusteam Finance. "There is room for some profit-taking, and that is what we are seeing today."
Utility shares, up 13 percent in the first two months of 2006 amid merger speculation, had the biggest drop among the 18 industry groups on the Stoxx 600, losing 1.2 percent Monday.
E.ON, which is trying to create the world's largest utility by taking over Endesa, slid 1.86 to 91.14. Endesa, a Spanish power company, fell 71 cents to 26.63. Electricite de France dropped 72 cents to 42.05.
Suez decreased 60 cents to 33.20. Suez and Gaz de France representatives met with Enel executives in Italy last weekend, Le Figaro reported, citing unidentified sources. A spokeswoman for Suez declined to comment.
Enel fell 8 cents to 6.95. Gaz de France added 26 cents to 30.44.
*
Mergers drive gains
Shares in Associated British Ports rose as a group including Goldman Sachs said it might bid for the company, Britain's largest ports operator. The company said it had not received any proposal.
Thomson, the biggest maker of television set-top boxes, surged 86 cents to 16.18 after the newspaper The Business said that the company might get an offer from a group of banks.
But Ericsson fell 70 ore to 29.80 kronor. The company, the largest maker of wireless networks, may consider bidding for Lucent in the United States to thwart a merger of Lucent and its French rival Alcatel, The Times in London reported, citing analysts. Ericsson declined to comment. In Paris, Alcatel shares slipped 25 cents to 12.80.
KarstadtQuelle shares, which have more than doubled in the past six months, fell 43 cents to 22.25. The company reported a loss that was almost double analysts' estimates, while its chief executive, Thomas Middelhoff, played down speculation that Madeleine Schickedanz might buy the 40 percent of the company she does not already own.
Separately, the investment bank Goldman Sachs said that it had paid 3.7 billion for a controlling stake in the property group of KarstadtQuelle.
*
Drug makers slide AstraZeneca, a British drug maker, fell 76 pence to l28.99 after an unidentified investor sold more than two million American depositary receipts in a single transaction as U.S. markets opened.
Sanofi-Aventis led decliners on the Euro Stoxx 50 after it bought a stake of nearly 25 percent in Czech generic-drug maker Zentiva for 430 million.
Akzo Nobel fell after saying it expected to ask for approval of a fertility product in 2008, implying a delayed filing for the treatment.
Source: International Herald Tribune
Related Articles
- Surveyed Neurologists in Both the United States and Europe Indicate That a Once-Daily Transdermal Formulation of Levodopa Would Earn a 30 Percent Patient Share in Parkinson's Disease
- ITW Reports Loss of 6 Cents in Diluted Income Per Share From Continuing Operations in the 2009 First Quarter Due to 24 Percent Revenue Decline and 23 Cents of Impairment and Discrete Tax Charges; Company's Free Operating Cash Flow Totals $386 Million in F
- A Drug That Improves Exercise Capacity By a Greater Percentage Than Tracleer Would Earn a 48 Percent Patient Share in the Pulmonary Arterial Hypertension Market
- A Weight Neutral Oral Antidiabetic Drug Would Earn a 25 Percent Patient Share in the Type 2 Diabetes Drug Market
- A Drug With Efficacy Superior to That of Remicade at Inducing Closure and Healing of Fistulas Would Earn a 30 Percent Patient Share in the Crohn's Disease Drug Market
- AstraZeneca's Recentin Plus FOLFOX4 to Earn 10 Percent Patient Share in the Treatment of Colorectal Cancer By 2016
- AstraZeneca's Zactima to Earn Almost Five Percent Patient Share in the Treatment of Non-Small-Cell Lung Cancer By 2016
- LVIA Passenger Traffic Fell 16.2 Percent in May: Delta Connection, Northwest Airlines Had Biggest Declines.
- Video Game Sales Fell 10 Percent in May: NPD
- Chevron: Profits Fell 11 Percent
 |
 |
User Comments (0)
RSS Feeds