ADVFN III Morning Euro Markets Bulletin
Daily world financial news from Thomson Financial News Supplied by advfn.com
25 Apr 2008 09:49:30
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London
London shares up early on after U.S. gains; UK banks rally; eyes on GDP
At 9:12 a.m., the FTSE 100 index was up 25.4 points at 6,076.1, with the FTSE 250 index 55.9 points higher at 10,030.3. "The FTSE opened firmer this morning as yesterday's rally on Wall Street carried over this side of the pond," said Mic Mills from tradindex.com.
"News from Merrill has added some more credence to the feeling that the worst of the credit crunch has been weathered," he added.
Overnight on Wall Street, the DJIA closed 85.73 points firmer at 12,848.95, while the Standard & Poor's 500 index rose 8.89 to 1,388.82 and the Nasdaq Composite index climbed 23.71 points to 2,428.92.
In Asia, the mood was mixed, with the Hang Seng index closing 164 points lower at 25,516.78, and the Nikkei 225 index ending 322.60 points higher at 13,863.47.
On the economics front, the UK economy is expected to have grown at its slowest rate in two-and-a-half years in the first quarter of the year as the credit crisis takes its toll.
Analysts reckon Friday's quarterly GDP figures will show growth dipped to 0.5 percent from the previous quarter, dragging the annual rate down to 2.6 percent from 2.8 percent.
Back with equity movements, strength was seen among banking issues on Friday, with Alliance & Leicester up 8 pence at 501, HBOS adding 10-1/4 pence to 499-1/4, Lloyds TSB taking on 8 pence to 444 and Barclays rising 5-3/4 pence to 461.
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Elsewhere, a retreat in oil prices helped lift shares in British Airways, up 3-3/4 pence at 216-1/2, TUI Travel, which gained 1-3/4 pence to 234, and Thomas Cook, 3-1/4 pence firmer at 260-1/2.
World oil prices, which had threatened to break the $120-per-barrel level, fell further in Asian trading on Friday after a strengthening U.S. dollar and rising U.S. crude stockpiles prompted traders to lock in profits.
Meanwhile, shares in Thomson Reuters continued their rally ahead of first-quarter results next week, up 39 pence at 1,598. And a broker upgrade helped bolster shares in Carphone Warehouse, which advanced 39 pence to 1,598, with Morgan Stanley lifting its rating to 'overweight' from 'equal-weight'. The broker said much of the recent share weakness appears to have been caused by concerns about Carphone Warehouse's seeming inability to turn profits into cash.
Morgan Stanley said it thinks it unreasonable to expect a company growing so fast to generate cashflow. Turning to the casualties, WPP headed the loserboard, off 5.4 percent or 34 pence at 596, after the advertising and marketing group reported weaker-than-expected first-quarter organic growth of 5 percent, with revenues affected by a slower March in western Europe.
Meanwhile, Aviva shed 11-1/2 pence to 615, as falling sales in its key UK division clouded otherwise decent results, prompting Merrill Lynch to keep a 'neutral' rating on the stock.
Earlier, the UK insurer reported sales in the UK dipped 3 percent to 2.769 billion pounds, with the company blaming reduced consumer demand for saving products amid growing economic uncertainty. Merrill Lynch said Aviva's long-term savings came in 5 percent below its expectations, albeit 1 percent above consensus.
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And shares in Pearson fell, down 1-1/2 pence at 663-3/4 on profit taking as the education and newspaper publisher said it has made a "good start" to 2008 and added it is trading in line with the expectations set out in its preliminary results announcement on March 3.
Elsewhere, Imperial Tobacco shares were 17 pence weaker at 2,524, with The Financial Times reporting the competition watchdog is expected on Friday to unveil wide-ranging allegations of cigarette price-fixing involving tobacco companies and retailers.
On the second tier, Go-Ahead was the best off, up 130 pence at 1,580, after the group said third-quarter trading was strong and added it sees its full-year performance in line with its expectations and significantly ahead of last year's record results.
Sector peers rallied in response, with Stagecoach up 9 pence at 212 and blue chip Firstgroup adding 22 pence to 550.
Among casualties, easyJet shares lost 2 pence at 286 after ABN Amro downgraded its stance to 'hold' from 'buy' as part of an airline sector review, citing recent record highs in oil, slowing premium traffic and weakening consumer confidence.
As such, it has made sharp reductions to all its airline estimates and is not surprised many investors would not want to touch airline stocks.
UK Diary of Events:
For a diary of key financial and corporate events in the UK today, Click here
US Summary:
For a summary of US stocks at yesterday's close of trade, Click here
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Frankfurt
German shares TFN market data at 10:20 a.m.
DAX - up 62.70 points or 0.92 percent at 6,884.02
MDAX - up 36.93 points or 0.40 percent at 9,218.44
TecDAX - up 8.54 points or 1.01 percent at 851.80
DAX futures - up 42.00 points or 0.61 percent at 6,932.50
Major Gainers:
BMW jumped 1.12 euros or 3.34 percent to 34.70 as investors welcomed the company's move to hike risk provisions by 236 million euros to safeguard against defaulted loans and delayed payments, as well as the company's reiteration of full-year guidance.
Deutsche Boerse, up 2.68 euros or 2.93 percent at 94.10
Deutsche Lufthansa, up 0.48 euros or 2.76 percent at 17.85, after the airline said operating profit is set to at least remain flat this year, though it aims for an improvement, adding there is "nothing to fear from possible headwinds".
Hypo Real Estate, up 0.55 euros or 2.35 percent at 23.91
Major Decliners
BASF, down 3.70 euros or 3.94 percent at 90.13, mainly a technical effect, as the shares traded without the rights to a dividend of 3.9 euros per share for the first time.
Volkswagen, down 4.13 euros or 2.23 percent at 181.20, after its biggest shareholder Porsche failed Thursday night to get approval at the annual shareholders meeting for its proposal to scrap Lower Saxony state's 20 percent blocking minority in VW.
ThyssenKrupp, down 0.30 euros or 0.75 percent at 39.61
Linde, down 0.50 euros or 0.53 percent at 93.89
Metro, down 0.22 euros or 0.45 percent at 48.53
Other Stocks in the News:
MDAX-listed ProSiebenSat.1 plummeted 3.48 euros or 25.63 percent to 10.10, after the broadcaster said first-quarter recurring EBITDA dropped 25.1 percent on falling revenues from its German-language free TV operations.
TecDax-listed Software AG slid 0.14 euros or 0.32 percent to 43.87 after the stock was downgraded to "neutral" from "buy" at Merrill Lynch.
Dax-listed Bayer rose 1.12 euros or 2.09 percent to 54.81, adding to yesterday's surge, after it released first-quarter earnings that exceeded market expectations. James Knight, an analyst at Collins Stewart, lifted his price target on Bayer to 62.9 euros from 57.7 euros.
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Paris
Paris shares TFN market data at 10:35 am; shares rise, led by tech stocks
Major indices:
CAC-40 up 46.64 points, or 0.95 percent, at 4,976.19
SBF-80 up 43.38, or 0.78 percent, at 5,626.50
SBF-120 up 32.93, or 0.92 percent, at 3,598.75
33 CAC-40 stocks up
7 CAC-40 stocks down
Major gainers:
Alcatel-Lucent, up 0.31 euros, or 7.64 percent, at 4.37; STMicroelectronics, up 0.32, or 4.46 percent, at 7.39. Ericsson shares soared in Friday morning deals after the Swedish group's first-quarter results came in far better than expected, buoyed by good sales growth
Credit Agricole, up 0.52, or 2.50 percent, at 21.35. Financial stocks are rebounding in Friday's renewed market rally Seb SA, up 10.80, or 9.98 percent, at 119.00, after posting consensus-beating sales and operating profit figures for the first quarter of 2008
Valeo, 0.99, or 3.93 percent, ahead at 26.15. Net profit and operating profit for the first quarter were well ahead of consensus thanks to strong operating improvements
Major losers:
Air Liquide, down 1.24, or 1.27 percent, at 96.16. Credit Suisse downgraded the chemicals group to 'underperform' from 'neutral' following Thursday's first-quarter figures Pernod Ricard, down 0.74, or 1.00 percent, at 73.26. Dresdner Kleinwort downgraded the drinks groups to 'add' from 'buy'
Most active stocks:
STMicroelectronics, 3.54 million shares traded
Axa, up 0.53, or 2.28 percent, at 23.51. 2.13 million shares traded
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Amsterdam
Amsterdam shares TFN market data at 10.13 a.m. - Randstad up on results
MAJOR INDICES
AEX 469.76, up 3.62 points, or 0.78 percent
AMX 655.94, up 3.05 points, or 0.47 percent
Government bonds lower
MAJOR GAINERS
Randstad added 2.32 percent to 26.85 euros, as the staffing company posted first-quarter results at the top end of forecasts, saying it expects moderate revenue growth in the second quarter
TNT added 3.03 percent to 24.80 euros. Dutch media said Friday that TNT's Dutch mail competitor Sandd sees market share of Sandd, Selekt Mail at 18 percent in 2010, not the 50 percent seen by TNT to justify its Dutch wage restraint wishes
ASML gained 2.27 percent to 18.93 euros, as Samsung Electronics Co Ltd. on Friday delivered first-quarter profit that beat market expectations, easing worries about a flagging memory chip market
USG People gained 1.97 percent, buoyed by Randstad's well received figures Fugro was 0.89 percent up at 55.38 euros, as it said Friday it has acquired BKS Surveys Ltd., an aerial mapping services company based in Northern Ireland, from Amalgamated Metal Corp. for an undisclosed sum.
OPG was 0.82 percent stronger at 17.20 euros, despite reporting first-quarter results that failed to meet analysts' expectations
MAJOR DECLINERS
Wolters Kluwer was the only blue chip decliner, down 0.23 percent at 17.06 euros On the midcap, LogicaCMG fell 1.35 percent to 1.46 euros as Merrill Lynch cut its rating on the stock to 'neutral' from 'buy'
Pharming was off 3.45 percent at 0.84 euros as German rival Jerini gained European approval for its lcatibant drug. The drug is a competitor of Pharming's Rhucin, which was denied European approval earlier this year
Forex
London 0815 GMT Hong Kong 0500 GMT
U.S. dollar
yen 104.65 up from yen 104.20
Swiss franc 1.0420 up from Swiss franc 1.0353
Euro
U.S. dollar 1.5573 down from U.S. dollar 1.5678
yen 162.98 down from yen 163.25
Swiss franc 1.6215 down from Swiss franc 1.6237
pound 0.7897 down from pound 0.7938
Pound
U.S. dollar 1.9720 down from U.S. dollar 1.9741
yen 206.37 up from yen 205.51
Swiss franc 2.0532 up from Swiss franc 2.0441
Australian dollar
U.S. dollar 0.9309 down from U.S. dollar 0.9394
pound 0.4721 down from pound 0.4758
yen 97.32 down from yen 97.80
