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Monday July 05, 04:51
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Flat opening on bourses as US closed
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Europe’s bourses started the week flat following a lacklustre Friday on Wall Street with concerns over the price of oil and US being closed for the Independence Day holiday keeping traders on the sidelines.
The FTSE Eurotop 300 was flat at 989.15 with the Frankfurt Xetra Dax off 0.1 pr cent to 3,996.85, the Paris CAC-40 up 0.1 per cent to 9,689.23 and London’s FTSE 100 flat at 4,408.1.
The oil sector will certainly be in focus this morning. World oil supplies came under more pressure as Iraqi crude exports were disrupted by pipeline explosions, and Yukos, the Russian oil group, moved closer to bankruptcy. See more on oil price concerns
It was supposed to be the week of reckoning on Iraq and interest rates. But for some on Wall Street, it turned out to be the week of reckoning on the strength of the economic recovery. On Friday, the S&P 500 eased 3.56 points, or 0.3 per cent, to 1,125.38, putting the benchmark index off 0.8 per cent for the week. The Nasdaq Composite, meanwhile, declined 8.89 points, or 0.4 per cent, to 2,006.66, putting the tech-heavy index off 0.9 per cent for the week. The Dow Jones Industrial Average fell 51.33 points, or 0.5 per cent, on Friday to 10,334.08, off 0.4 per cent for the week. See more on Wall Street
The question preoccupying investors in the UK this week will be whether the Bank of England will raise interest rates for a third successive month. See more on week ahead
With two of the world’s oil giants in London, BP and Royal Dutch/Shell, a upward move in the oil price can have a positive effect on the Footsie as well as its negative economic impact. ENI of Italy rose 0.6 per cent and France’s Total added 0.3 per cent, while Shell added 0.1 per cent to 401.25p and not helping the FTSE after all, BP slipped 0.2 per cent to 480.2p.
Retailers will be the centre of attention also, particularly Marks and Spencer and J Sainsbury. Recently installed M&S chief Stuart Rose is reported to be planning to unveil a £750m sweetener for shareholders at his strategy update on July 12. There is also much talk of how crucial Philip Green’s talks with the high street retailer’s pension fund trustees are to his ability to press ahead with his takeover attempt. Marks rose 0.8 per cent to 360p.
Sainsbury is in the news on two fronts. Firstly, the row over the pay-off to ousted chairman Sir Peter Davis, and secondly the suggestion the ket family shareholders could be swayed to accept a bid from a US private equity group. Sainsbury added 1.3 per cent to 277p.
Aventis, the French drug group, will be under pressure after Barr Laboratories said late on Friday it had received tentative US regulatory approval to market a generic version of Aventis’ extended-release allergy drug Allegra-D. Aventis was flat in early trade.
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