June 27, 2006	Tuesday	Jumadi-ul-Awwal 30, 1427

LONDON, June 26: European stocks were mixed on Monday, with the steel sector in sharp focus after Arcelor finally succumbed to a partnership deal with Mittal Steel to create a global steel behemoth, dealers said.

News of the Arcelor deal over the weekend prompted a new round of merger speculation, but caution remained ahead of a likely decision by the US Federal Reserve later this week to hike American borrowing costs to 5.25 per cent.

In Monday’s early deals, London’s FTSE 100 index of leading shares slid 0.13 percent to 5,684.90 points, Frankfurt’s DAX 30 index eased 0.01 per cent to 5,529.03 points, while in Paris the CAC 40 gained 0.10 per cent to 4,822.33.

The DJ Euro Stoxx 50 index of leading eurozone shares lost 0.12 per cent to 3,545.89 points.

The euro stood at $1.2562.

Before the weekend, Wall Street shares had closed basically flat Friday as investors bit their nails ahead of the Federal Reserve’s interest rate decision this Thursday, with odds growing the hiking cycle will continue.

Japanese share prices reversed early losses to close higher on Monday after bargain hunters stepped in to chase the main Nikkei index back above the key 15,000 points level, dealers said.

In European trade on Monday, steelmakers saw modest gains on the back of the Arcelor-Mittal tie-up.

In London, the share price of Anglo-Dutch producer Corus added 0.23 per cent to 431.75 pence.

Across in Frankfurt, German steel company Thyssenkrupp added 0.12 per cent to 25.83 euros.

However, in Paris, Arcelor shares remained suspended, despite announcing that it has agreed to a merger with Mittal Steel. The stock last traded at 35.02 euros.

A spokesman for Euronext Paris said that the exchange was awaiting word from French financial market regulator AMF and Euronext’s internal listing department before taking any further action.

The AMF had requested Euronext to suspend trading in Arcelor last week “pending a company statement” clarifying its intentions with regard to rival merger plans, one involving Mittal and the other involving Russian steelmaker Severstal.

The new Arcelor-Mittal group will be traded on the New York, Paris, Madrid, Amsterdam, Brussels and Luxembourg stock exchanges.

Back on Wall Street, the Dow Jones Industrial Average fell 0.27 percent to 10,989.09 points and the tech-heavy Nasdaq composite lost 0.07 per cent at 2,121.47 points.

The broad-market Standard and Poor’s 500 index dipped 0.09 per cent to 1,244.5 points.

After a see-saw week, Friday’s session was mixed as traders remained cautious ahead of the Fed’s rate decision on June 29.

The Fed is expected to raise rates by a quarter-point, the 17th straight increase, bringing the base rate to 5.25 per cent.

In Asia on Monday, Tokyo’s benchmark Nikkei-225 index rose 0.19 per cent to close at 15,152.40 points but dealers said that the mood remained somewhat cautious ahead of an expected US interest rate hike Thursday.—AFP