Stocks Rise on Rate Hopes
May 02, 2011
The CAC-40 index of actively traded French stocks closed at 2019.26, up 33.05 points. Volume was light. The release Tuesday of German M3 money supply data has anxious investors looking for the Deutsche Bundesbank to allow its securities repurchase rate to fall at its meeting Thursday, traders said. The Bundesbank said July M3 money supply growth slowed to a slightly lower-than-expected annualized and seasonally adjusted 8.6% from 9.6% in June. Some investors were taking a chance that the Federal Reserve's Federal Open Market Committee would raise U.S. interest rates, traders said, although most economists do not project that the Fed will change rates. The stronger dollar also helped boost the CAC-40, as dollar-sensitive stocks, such as Elf Aquitaine, Total, LVMH and L'Oreal racked up gains. Late Tuesday, the dollar was trading at 1.4883 marks, up from 1.4870 in late London trading Monday. Petroleum giant Elf Aquitaine rose 3.5%, or 12.7 francs, to 376.9, while rival oil company Total rose 8.5 francs, or 2.4%, to 369.3. Luxury group LVMH Moet-Hennessy-Louis Vuitton advanced 3.3%, or 36 francs, to 1140, on the back of revived investor interest and hopes earnings will improve with the strengthening dollar. Beauty and pharmaceutical group L'Oreal rose 0.7%, or 11 francs, to 1587 francs. Insurer Cassell was also higher, rising 4 francs to 287.5 after reporting a 24.5% rise in first-half revenues, largely due to acquisitions. Municipal services company Lyonnaise des Eaux gained 2.4%, or 10.8 francs, to 458.5. The company outbid British companies to win a water management contract in Turkey, the first-ever awarded by that country to the private sector.
