Sun, Nov 02, 2003 - Page 10 News List

European markets keeping their eye on Khodorovsky


European stock markets drifted mainly lower Fri-day in reaction to rudderless early trading on Wall Street, while traders focused on next week's probable rise in British interest rates.

The British FTSE 100 index slipped 0.31 percent to close at 4,287.6 points and the French CAC 40 ended 0.42 percent lower at 3,373.20 points.

The German DAX 30 bucked the trend, rising 0.45 percent to 3,655.99 points.

The DJ Euro Stoxx 50 index of leading euro-zone shares edged up 0.14 percent to 2,575.04 points.

The euro was changing hands for US$1.1575 in New York.

Hong Kong shares ended 0.38 percent higher in generally directionless trade.

In Britain, stronger than expected house pricing inflation numbers crystallised expectations that the Bank of England will raise British interest rates next week.

A survey from the Nationwide building society showed prices up a seasonally adjusted 2.0 percent from September, the highest rate for over a year.

Topping London's FTSE 100 was Rexam after the packaging group unveiled plans to buy Brazilian drinks can maker Latasa for £272 million (US$461 million), mostly funded by a £218-million rights issue.

Latasa is the leading supplier of beverage cans in Brazil, Argentina and Chile, with the acquisition making Rexam the world's biggest beverage can manufacturer. Earnings per share enhancement is seen from year one.

"The acquisition appears well priced and should be well received by the market," commented UBS, while Dresdner KW said the potential outlook and cash generation capability "looks huge."

Shares in Rexam jumped more than nine percent in reaction to the deal, up 33 pence to 430.

Meanwhile oil stocks recovered slightly following the shock of the previous day's announcement that Russian authorities had frozen shares in energy major Yukos following the arrest of its chief executive, Mikhail Khodorkovsky.

BP -- which recently unveiled a multi-billion dollar deal to form a joint venture with another Russian oil firm, TNK -- rose 1.05 percent to £4.09, while Shell gained 0.82 percent to £3.68.

In limited corporate news, Dutch banking group ABN Amro jumped 1.52 percent to 18.05 euros in Amsterdam after announcing a 40-percent surge in third-quarter net earnings.

In Frankfurt, Metro shares rose 0.06 percent to 35.18 euros as the news that Europe's third-biggest retailer has scrapped plans to sell its real estate unit took the shine off third-quarter results in line with expectations.

Other European markets put in a mixed performance. The Swiss SMI index fell 0.23 percent to 5,211.4 points while the Milan Mib 30 was unchanged.

Amsterdam's AEX added 0.51 percent to 330.22, the Brussels Bel-20 gained 1.06 percent to 2,160.67 and the Madrid Ibex-35 rose 0.03 percent to 7,121.0.

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