ADVFN III Morning Euro Markets Bulletin
Daily world financial news from Thomson Financial News Supplied by advfn.com
09 Apr 2008 09:51:12
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London
London shares weak at open after falls in New York, Asia; HBOS drops
UK blue chips were lower in opening deals, extending yesterday's falls after weak showings overnight on Wall Street and in Asia, with HBOS the biggest early faller in reaction to a downgrade by Credit Suisse to 'underperform' from 'neutral' as part of a UK banks review.
At 9.14 a.m., the FTSE 100 index was 15.1 points lower at 5,975.1, after closing 24.6 points weaker yesterday at 5,990.2, with ex-dividend factors only knocking around 1.3 points off the blue chip index. The FTSE 250 index was 32.8 points higher at 10,141.5 as heavyweight housebuilders rallied.
Overnight on Wall Street, the DJIA closed 35.99 points lower at 12,576.44, while the S&P 500 index lost 7.00 points at 1,365.54, and the Nasdaq composite index 16.07 points at 2,348.76 after a batch of disappointing first-quarter corporate earnings, and as minutes from last month's FOMC meeting voiced concerns about the slumping economy.
Today in Asia, Japan's Nikkei 225 index ended down 138.54 points at 13,111.89, with investors taking profits on recent gains as the yen strengthened and other Asian stocks weakened. In Hong Kong, the Hang Seng index closed 327.12 points lower at 23,984.57
In London, HBOS was the top FTSE 100 faller early on, losing another 17-1/2 pence at 532 after falling back with the banking sector yesterday after depressing news on UK house prices and mortgage completions, with Credit Suisse's downgrade weighing on the stock today.
Credit Suisse said that it is downgrading HBOS as it continues to expect 10 percent house price falls in the UK in 2008 which could have a major impact on banks capital ratios.
Among other weak banking blue chips again today, RBS shares shed 8-1/2 pence at 365-3/4, with Barclays down 9 pence at 468-3/4, and Standard Chartered off 23 pence at 1,775.
Elsewhere among the blue chip fallers, news of a broker downgrade also impacted SABMiller, down 15 pence at 1,101.
Citigroup cut its rating for the brewer to 'hold' from 'buy' with its price target cut to 1,245 pence from 1,450 pence ahead of the firm's fourth-quarter volume performance on April 16 and full-year results on May 15. Citigroup said the move has been prompted by cost pressures revealed by SABMiller, with the broker slightly lowering its estimated volume growth because of macro-economic uncertainties.
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Ex-dividend factors, meanwhile, contributed to four of the blue chip fallers -- Pearson, Admiral Group, Hammerson, and Prudential.
Energy group BG Group managed to shrug off its ex-dividend shackles today, however, adding 14 pence at 1,210 as oil majors moved higher as crude prices held around the $109 a barrel level, marking time ahead of the U.S. government's weekly energy stockpiles report due later today.
Royal Dutch Shell added another 14 pence at 1,821, with BP up 2 pence at 539, while Tullow Oil gained 3 pence at 658-1/2, and Cairn Energy rallied 64 pence higher to 2,897.
Elsewhere with commodities, shares in Eurasian Natural Resources took on 18 pence at 1,113 as maiden full-year results from the recently promoted, Kazak-based miner beat market expectations.
ENRC posted a 52 percent jump in full-year EBITDA, before exceptional items to $1.91 billion, up from $1.26 billion in the year-earlier period boosted by strong demand for ferroalloys and iron ore.
Unilever shares were also in demand, taking on 10 pence at 1,735 after the Financial Times said the company has received at least two bids for its US detergents business that it put up for sale last August.
And BT Group shares continued to welcome yesterday's news of the appointment of a new CEO for the telecom incumbent, adding another 4-1/4 pence at 237-1/4.
But it was lone blue-chip housebuilder Persimmon which topped the FTSE 100 risers board, rallying 21 pence higher at 708, recouping yesterday's losses as sentiment for the sector ebbed and flowed ahead of tomorrow's UK interest rate decision.
UK housebuilders dropped sharply yesterday in reaction to the poor house price and mortgage completions data, but with at least a quarter point expected to UK interest rates on Thursday the sector revived today.
Broker upgrade on valuation grounds also helped for the second housebuilders.
Taylor Wimpey was the top mid cap riser, adding 7-1/2 pence at 177-1/2 after Goldman Sachs raised its rating 'neutral' from 'sell' with an increased price target of 163 pence, up from 130 pence following a period of share price underperformance.
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Barratt Developments shares were close behind, up 13-1/4 pence at 390-1/4 with Panmure Gordon upping its rating to 'hold' from 'sell'.
Also among the FTSE gainers, brewer and pubs operator Marston's took on 5-1/2 pence at 206 after Citigroup raised its stance to 'buy' from 'hold' in a sector review. And fellow pubs operator Mitchells & Butlers gained 8-3/4 pence at 337 after a 'resilient' trading update.
There were few features on the downside for mid caps, although ex-dividend factors weighed on IMI, Morgan Sindall, and F&C Asset Management.
On the macro front, investors have a batch of domestic data to digest today ahead of tomorrow's Bank of England interest rate decision.
First up, the Nationwide March consumer confidence report released overnight came in at the lowest level since the survey began in May 2004. Nationwide said its consumer confidence index ticked down another point to 77 in March, continuing the trend of monthly falls which started in the autumn and reflecting "weakening house price growth and ongoing uncertainty in the financial markets".
Later this morning, UK February manufacturing output figures are expected to slow to 0.1 percent, down from 0.4 percent in January, though base effects mean the annual rate is forecast to rise to 1.5 percent from 0.6 percent.
The wider measure of industrial output should rebound to show 0.2 percent growth from a 0.1 percent decline. And the March BRC shop price index will be released at 10:30 p.m. today.
Across the Atlantic, US wholesale inventories are expected to have increased 0.5 pct in February, three tenths of a point less than in the previous month.
UK Diary of Events:
For a diary of key financial and corporate events in the UK this week, click here
US Summary:
For a summary of US stocks at yesterday's close of trade, click here
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Milan
MILAN - Market data at 9.40 a.m.:
Main indices:
Mibtel at 25,505 points, down 0.20 percent
S&P/Mib at 33,583 points, down 0.26 percent
Main S&P/Mib losers
Intesa Sanpaolo SpA down 1.41 percent at 4.74 euros as J.P. Morgan downgraded the stock to 'neutral' from 'overweight' and reduced the price target from 6.3 euros per share to 5.75 euros per share
STMicroelectronics NV down 1.36 percent at 7.10 euros
UniCredit SpA down 1.31 percent at 4.78 despite J.P. Morgan confirming its 'overweight stance on the stock with a 7.00 euros target
Mediolanum SpA down 1.21 percent at 4.16 euros as Dresdner Kleinwort downgraded the stock to 'sell' from 'hold and reduced its price target to 3.8 euros per share from 5.2 euros citing a tough 2008 outlook for sales, margins and earnings
Finmeccanica SpA down 1.06 percent at 21.41 euros
Main S&P/Mib gainers
Telecom Italia SpA up 3.09 percent at 1.501 euros
Fastweb SpA up 1.69 percent at 19.80 euros. In an interview with daily MF, chief executive Stefano Parisi said the first quarter went very well, with the group beginning to generate cash, and it is now able to reduce significantly its investments. He also said that if there is money to invest in Italy it is better to use it for development, while a de-listing of the group by its major shareholder Swisscom AG is not on the agenda
Parmalat SpA up 1.58 percent at 2.51 euros, continuing on yesterday's rise, as its shareholders are due to meet today and are expected to re-confirm Enrico Bondi as chief executive. Bondi is widely accredited for the turnaround of the food-and-dairy group after its collapse at the end of 2003
Lottomatica SpA up 1.15 percent at 21.10 euros
Seat Pagine Gialle SpA up 1.03 percent at 0.14 euros
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Brussels
BRUSSELS - Market data at 09.49
Main index
Bel 20 down 14.27 points or 0.37 percent at 3,843.13
Bel 20 gainers
Belgacom up 0.41 euro or 1.37 percent at 30.40, to hold AGM today to approve proposed 1.68 eur dividend and discuss share buyback, Petercam upgrades to 'buy' from 'hold'
Inbev gains 0.69 euro or 1.18 percent to 58.97, analysts cheer the group's upbeat comments on the outlook for 2008 at Monday's Dresdner Kleinwort Consumer Conference
Bel 20 fallers
Dexia drops 0.24 euro or 1.32 percent to 18.01
KBC 1.06 euro or 1.23 percent lower at 84.95
Fortis down 0.14 euro or 0.83 percent at 16.80
Agfa-Gevaert sheds 0.03 euro or 0.69 percent to 5.04, in the running for IT contract with Parisian hospitals
Ackermans & van Haaren down 0.26 euro or 0.39 percent at 66.24, Petercam expresses its confidence in the value creation process within the company, keeps a positive view towards the stock despite the outperformance recorded over the last months.
GBL edges 0.23 euro or 0.29 percent lower to 78.07, Bank Degroof reiterates its 'buy' rating on the stock after yesterday's AGM, expects the group to sell its 0.6 percent stake in Iberdrola in the next few months
Outside the Bel 20
Thrombogenics flat at 7.74, completes patient enrolment for Phase II Microplasmin in treatment of ischemic stroke - intravenous (MITI) IV study. KBC's Jan Dekerpel says "the potential of an effective product is huge and attracts the interest of the pharmaceutical world".
Innogenetics up 0.02 euro or 0.44 percent at 4.55, extends its research partnership with Solvay by another two years to the end of 2010, KBC reiterates 'reduce' rating and 3.10 euro target
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Amsterdam
AMSTERDAM - Market data at 10.10 am
Major indices
AEX 462.67 points, down 1.77 points, or 0.38 percent
AMX 640.19 points, down 1.73 points, or 0.27 percent
Government bonds mixed
Major decliners
TNT down 1.93 percent to 24.42 euros following a profit warning from rival UPS
Aegon down 2.54 percent to 10.15 euros
ING down 1.92 percent to 25.31 euros as KBW downgraded the stock to 'underperform' from 'market perform'
Philips down 0.81 percent to 24.57 euros following widely anticipated news it will exit its loss-making U.S. TV business
Aalberts down 0.29 percent to 13.62 euros. The company acquired a leading producer of multilayer tube and fittings for an undisclosed sum
Corio down 1.78 percent to 58.64 euros
Major gainers
Unilever up 0.42 percent to 21.47 euros on reports it has received at least two bids for its U.S. detergents business
KPN up 1.79 percent to 11.40 euros
Crucell up 1.75 percent to 11.63, extending yesterday's gains on news it signed a non-exclusive STAR research licence agreement with Celltrion Inc. for the production of recombinant proteins
CSM up 1.02 percent to 22.73 euros after SNS Securities upgraded the stock to 'accumulate' from 'hold'
Forex
London 0815 GMT Hong Kong 0600 GMT
U.S. dollar
yen 102.36 up from yen 102.30 yen
Swiss franc 1.0129 down from Swiss franc 1.0134
Euro
U.S. dollar 1.5708 up from U.S. dollar 1.5702
yen 160.78 up from yen 160.63
Swiss franc 1.5927 up from Swiss franc 1.5913
pound 0.7984 down from pound 0.7986
Pound
U.S dollar 1.9675 up from U.S. dollar 1.9657
yen 201.37 up from yen 201.09
Swiss franc 1.9933 up from Swiss franc 1.9920
Australian dollar
U.S. dollar 0.9274 down from U.S. dollar 0.9288
pound 0.4713 down from pound 0.4724
yen 94.90 down from yen 95.04
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