Europe Closes Higher

European stock markets were higher Friday as Wall Street struggled on the release of economic data

European stock markets were higher on Friday. In London, the Financial Times Stock Exchange-100 gained 19.60 points, or 0.40%, to close at 4914.00. The FTSE trimmed gains at the close as Wall Street was trading flat after non-farm payrolls data showed a surprisingly low number of new jobs were created in March. The news allayed fears about inflation and faster interest rate hikes, but gains were offset by a fall in the Michigan sentiment index and ISM data showing slower manufacturing growth. At home, oil added support as WTI traded above $55 per barrel and a report from Goldman Sachs suggests that oil markets may have entered a 'super spike' period, which could see oil prices hit $105: BP and Shell rose 0.64% and 0.11%, respectively. AstraZeneca was marked higher as Deutsche Bank raised its sales forecast for stroke drug Cerovive to $2 billion. The Somerfield takeover saga continued as the group entered talks with the three interested parties. FTSE giant Vodafone gained after Hutchison Whampoa's fiscal 2004 earnings failed to inspire investors. Fellow telecoms group BT gained after winning a 1.5 billion pound contract extension from the MoD. Diageo was among the top performers after an upbeat note from Deutsche Bank. Rolls-Royce said first-quarter 2005 is progressing well.

In Germany, the Dax gained 24.76 points, or 0.57%, to close at 4373.53. Frankfurt ended Friday's session comfortably higher as Wall Street trades marginally ahead as non-farm payrolls data show a surprisingly low number of new jobs were created in March, thus allaying fears about inflation and faster interest rate hikes. Locally, Continental continued yesterday's rally as a number of brokers raised their price targets. MAN was marked higher after winning a contract worth 1.5 billion euro from the UK's MoD. On the domestic macro data front, retail sales came in flat for February month-over-month, leaving a +1.0% year-over-year level. The PMI manufacturing survey dipped to 50.3 from a previous 52.2, which is below the 51.9 forecast. Stock-specifics again, DCX fell after announcing a 1.2 billion euro restructuring of its Smart car division. Brazilian iron ore mine company CVRD is negotiating a deal with Thyssen to raise its ore prices by 79%. Adidas expects to generate 1 billion euro in football related sales as a consequence of the world cup in Germany next year. Among MDax stocks, Merck rallied on ISuppli and DisplaySearch forecasts that LCD prices will rise in the second half of the year.

France's CAC-40 gained 12.30 points, or 0.30%, to close at 4080.08. The CAC40 ended modestly higher on Friday as Wall Street struggled to find its way on the first day of the second quarter. Having been buoyed by surprisingly low non-farm payrolls data for March, which seemed to allay fears about inflation and a faster pace of interest rate hikes, U.S. indices were nudged off opening highs by a lower-than-expected University of Michigan sentiment index, which fell to 92.6, from February's final reading of 94.1. At home, auto plays ended higher as French March new car registrations showed a rise of 2.5%, with the first quarter up 3.9%. Renault faired better, with sales for March up 2% compared with PSA's decline of 2.7%. However, PSA was supported by news that it, and Italian carmaker Fiat, had struck a deal with Turkish vehicle maker Tofas for the joint development and production of light commercial vehicles for the European market.

Asian markets were mixed on Friday. In Japan, the Nikkei 225 gained 54.68 points, or 0.47%, to close at 11,723.63, as bargain hunting outweighed weaker-than-expected tankan index. Japan's March tankan indicated deteriorating sentiment, with the diffusion index of large manufacturers falling to 14 (from 22 in the previous survey), below economists' median forecast of 23. Mitsui Sumitomo Insurance rose 2.03% to 1,003 yen on a technical rebound. Oil exploration firm INPEX Co gained 6.27% to 610,000 yen on the back of firming oil prices, and after Goldman Sachs hiked its target to 675,000 yen on expectation of higher oil prices. But Sumitomo Mitsui Construction tumbled 12.61% to 97 yen, after the firm widened its net loss forecast to 254 billion yen, compared with its earlier estimate of 1 billion yen, for the just-ended fiscal year, and begged its creditor bank for aid. Sony inched down 0.23% to 4,260 yen on news that sales of its new PlayStation Portable handheld videogame was below expectation.

In Hong Kong, the Hang Seng Index dipped 25.53 points, or 0.19%, to close at 13,491.35. Hutchison Whampoa (HW) inched up 0.38% to $66.5 (Hong Kong), after the firm reported 2004 headline profit of $16.billion (Hong Kong), which was below S&P Equity Research's forecast, but in line with market expectation. Cheung Kong, HW's sister property firm, was flat at $69.25 (Hong Kong), as the firm posted $12.38 billion (Hong Kong) net profit in 2004 thanks to a sharp rise in property prices.

Canada's benchmark TSX/S&P gained 27.52 points, or 0.29%, to close at 9,639.90.

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