Sun, Nov 14, 2004 - Page 10 News List

European investors play it safe as they mull latest figures


European stocks were higher on Friday, but investors remained shy of adopting aggressive positions ahead of the weekend given the strength of recent market moves.

After touching two-year highs in the previous session, many investors moved to book profits.

"Investors are starting to reconsider prospects for 2005 and while dollar weakness and oil prices will remain problematic there are a few silver linings out there," said Anais Faraj, strategist at Nomura.

The Dow Jones STOXX 600 Index, which tracks Europe's 600 largest listed companies, was up 0.3 percent at 249.1. The Dow Jones Euro STOXX Index, which tracks companies in countries that joined the common currency, was 0.1 percent higher at 238.28.

At the close of trading, London's FTSE-100 Share Index was 0.4 percent higher at 4,793.9, while in Paris the CAC-40 Index was 0.03 percent higher at 3,835.11. Frankfurt's Xetra Dax Index was up 0.3 percent at 4,143.35.

Investors were also mulling the latest US and eurozone macroeconomic releases.

Data showed US retail sales rose 0.2 percent last month, in line with expectations. However a 0.9 percent rise in non-auto sales exceeded economists' estimates of 0.6 percent.

"This data shows that even in the face of higher oil prices, the US consumer is not on strike," said Philip Shaw, economist at Investec.

He added that the data supported a more optimistic outlook on US growth.

Investors were also cheered by the University of Michigan preliminary November consumer sentiment index reading. The index exceeded expectations, rising to 95.5 from 91.7 last month. Economists were looking for a preliminary reading of 93.

However eurozone economic data was less bullish. Data showed GDP growth slowed sharply to 0.3 percent in the third quarter from 0.5 percent in the second quarter below forecasts of 0.4 percent growth. The fall was led by France and Germany, which both grew by a meager 0.1 percent.

Media stocks were an early focus after UK satellite broadcaster British Sky Broadcasting Group on Friday reported that fiscal first quarter subscriber figures and revenues beat market expectations and showed further progress on its premium Sky+ services. Shares gained 4.1 percent to 554 pence.

Insurance stocks were also propelled higher. Allianz, Europe's largest insurer by gross premi-ums, on Friday reported an 8 percent decline in third-quarter net profit, with a fall in net investment income offsetting lower costs and a swing to profit at the company's banking operations.

Munich Re advanced 0.5 percent to 83.1 euros (US$107.37).

In Paris, the market's attention was drawn to a report in the French newspaper Les Echos that the government was considering a linkup of European Aeronautic Defense and Space with Thales to create an aerospace giant.

Thales shares topped the CAC, rising 5.2 percent to 33.3 euros (US$43.03), while EADS trailed the market, shedding 0.3 percent to 24.61 euros (US$31.8).

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