Greece woes spoil continental party
EUROPEAN shares rose in early trade yesterday, recovering some of Friday’s losses, with miners gaining on higher metals prices.
In morning trading, the FTSEurofirst 300 index was up 0.6 per cent at 1,058.15 points.
Miners were among early gainers, as copper rose on hope that strong Chinese demand could cut inventories.
Precious metals were also higher. Platinum and palladium prices hit fresh multi-month highs, buoyed by strong investor interest for new exchange-traded funds, while risk aversion supported gold.
Anglo American, Antofagasta, Vedanta and Xstrata rose between 0.9 and 1.8 per cent.
On Friday, the index fell 1.1 per cent, but is still up more than 63 per cent from its lifetime low of 9 March, as several major economies have emerged from recession.
Companies reporting earnings later in the week include Citigroup and Bank of America.
“There’s confidence the banking results this week will be strong, in investment banking,” said Justin Urquhart Stewart, director at Seven Investment Management.
“There’s enough momentum for the rally to continue, but that’s the short term. The market must have a correction at some stage, perhaps when stimulus packages are withdrawn around the globe.”
However, the heavyweight banking sector, which fell on Friday after disappointing results at JPMorgan, gave up most of its early gains.
Greek banks were the biggest fallers in the sector on continued worries about the country’s economic position.
Alpha Bank, Bank of Piraeus and EFG Eurobank fell between 4.9 and 5.7 per cent.
Those on the rise included BNP Paribas, Barclays and Lloyds Banking Group, up between 0.5 and 2.8 per cent.
Across Europe, Britain’s FTSE 100 France’s CAC 40 and Germany’s were up between 0.4 and 0.5 per cent.
Utilities moved higher on talk of consolidation in the sector.
International Power rose 4.7 per cent following weekend reports that French utility GDF Suez, up 1.2 per cent, will make a takeover bid. Both companies declined to comment. Others in the sector to gain included E.ON and Veolia, both up 0.7 per cent.
Among individual movers, Novartis gained 1.9 per cent after BofA Merrill Lynch upgraded the pharmaceuticals giant to “buy” from “neutral”. Cosmetics major L’Oreal rose 1.8 per cent after Deutsche Bank raised its rating on the stock to “buy”.