ADVFN III Morning Euro Markets Bulletin
Daily world financial news from Thomson Financial News Supplied by advfn.com
29 May 2008 09:53:21
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London
London shares higher early on; gains in NY, Asia; Man Group, miners up
At 9:14 a.m., the FTSE 100 index was up 57.1 points at 6,126.7, while the FTSE 250 index was 94.5 points higher at 10,151.8.
Overnight on Wall Street, the DJIA rose 45.68 points to 12,594.03, the S&P 500 index climbed 5.49 points to 1,390.84, and the Nasdaq composite index added 5.46 points to 2,486.70.
U.S. stocks managed to finish what was an erratic session with a moderate advance Wednesday as investors found some comfort in the upbeat data on durable goods orders. Oil prices, however, remain a big focus on Wall Street. Crude's recovery from its lows Wednesday ate into some of the stock market's enthusiasm over the durable goods data.
Key on Thursday is the release of U.S. GDP numbers. First-quarter GDP growth is expected to be upwardly revised to 1.0 percent from 0.6 percent, with most of the revision taking place in the trade sector.
In Asia, the mood was buoyant, with the Nikkei 225 index closing up 415.03 points at 14,124.47, and the Hang Seng index closing 134.48 points higher at 24,383.99.
In London, Man Group was among the top blue-chip risers, up nearly 3 percent, or 17-1/2 pence to 606, as the hedge fund manager reported an expectation-beating 60 percent increase in full-year profit, driven by a strong fund performance, and said it had made a robust start to the new financial year.
In reaction, Credit Suisse lifted its target to 670 pence from 640 pence, while repeating its 'outperform' stance. The broker said it is raising its net inflows forecasts for 2009 and 2010.
Sticking with results, Antofagasta experienced good gains early on, up 13 pence at 710, ahead of its first-quarter numbers Thursday, scheduled for release at 10:00 a.m. Sales are expected to rise from the $830.4 million reported in the year-earlier quarter on better output and prices.
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Rio Tinto, meanwhile, added 126 pence to 6,263, as it said it expects compound annual production growth to be 8.6 percent through to 2015 and that it is well-placed to take advantage of an expected doubling of world demand for its metals and minerals by 2022.
Sector peers also rallied. BHP Billiton added 38 pence to 1,997, Eurasian Natural Resources Corp was up 25 pence at 1,435, Lonmin rose 40 pence to 3,388, and Xstrata was 44 pence higher at 4,060.
Elsewhere among commodities, good gains were seen among oil stocks, as world oil prices retreated but stayed above $130 in Asian trade on Thursday amid growing jitters about falling U.S. gasoline consumption due to skyrocketing pump prices.
Oil majors BP and Royal Dutch Shell were up 7-1/2 pence at 613, and 22 pence at 2,176, respectively, while Tullow Oil was 23-1/2 pence firmer at 921.
BG Group, meanwhile, took on 11 pence to 1,301, as the Financial Times reported that the oil and gas exploration company is expected to sweeten its original bid for Origin Energy with a cash offer of at least A$13.2 billion for Australia's second largest retail energy supplier.
Turning to the casualties, a broker downgrade helped push shares in Standard Life lower, off 2 pence at 240-1/4, with JP Morgan lowering its recommendation to 'underweight' from 'neutral' as it feels the company is exposed to weaker sales in the United Kingdom. The broker also reduced its target to 230 pence from 245 pence.
Weakness was also seen among banks, with ABN Amro saying in a note Thursday that it expects a strong reversal in both earnings yield and leverage, which have driven up sector returns in recent years. The broker highlighted that capital market banks appear most at risk, notably Deutsche Bank.
HBOS slipped 7 pence to 424, Lloyds TSB fell 5 pence to 379-3/4, Barclays was off 4-1/4 pence at 383, and Royal Bank of Scotland lost 1-1/4 pence to 236-3/4.
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On the second tier, Caledonia Investments added 31 pence to 2,032-1/2, in the wake of its final results. Earlier, the investment company said that as the economic situation further unfolds, it expects a number of particularly good investment opportunities to arise, and may well put in place term bank facilities for up to 100 million pounds.
Caledonia Investments reported a 4.6 percent fall in full-year diluted net asset value. Meanwhile, Carpetright took on 13-1/2 pence to 794-1/2 pence, as it emerged that billionaire founder of MicroSoft Corp, Bill Gates, has bought a 3 percent stake in the company.
Looking at the downside, Shanks Group was the top faller, off over 5 percent or 13-1/4 pence at 242, after the waste management company reported a 10 percent fall in full-year pretax profit. In reaction, Altium Securities repeated its 'hold' view as it feels the stock is fully valued.
Elsewhere, Capital & Regional shed 13 pence to 289-3/4. The Financial Times reported that a 2.9 billion pounds shopping centre investment fund managed by Capital & Regional is to raise 300 million pounds through a deeply discounted rights issue to prevent a breach of a key debt covenant.
A broker downgrade hit Speedy Hire, with its shares falling 10-1/2 pence to 666-1/2, with UBS cutting its rating to 'neutral' from 'buy', while lowering its target to 750 pence from 850, in the wake of full-year results on Wednesday.
The broker said while it retains its belief Speedy Hire's business model will prove more resilient than the market may be expecting, it struggles to see any catalysts for a re-rating in the near term.
Finally, LogicaCMG was 1-1/2 pence weaker at 327 as Investec cut its recommendation on the software group to 'sell' from 'hold' citing headwinds.
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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Paris
Paris shares TFN market data at 10:15 a.m.
Major indices:
CAC-40 up 34.21 or 0.69 percent at 5,005.32
SBF-80 up 48.22 or 0.84 percent at 5,803.55
SBF-120 up 24.52 or 0.68 percent at 3,631.02
33 CAC-40 stocks up
7 CAC-40 stock down
Major gainers:
ArcelorMittal up 1.20 or 1.90 percent at 64.41; Total up 0.90 or 1.62 percent at 56.51; Vallourec up 4.31 or 2.23 percent at 195.78, all benefitting from continuing high oil prices
Danone up 0.80 or 1.46 percent at 55.67 after Citigroup added it to its most favoured stock list, replacing Pernod Ricard after its downgrade earlier in the week Alcatel-Lucent up 0.05 or 1.05 percent at 4.83 after Goldman Sachs upgraded it to 'neutral' from 'sell'
Major losers:
St Gobain down 0.72 pr 1.36 percent at 52.09 after Merrill Lynch downgraded the stock to 'neutral' from 'buy' at Merrill Air France-KLM down 0.19 or 1.13 percent at 16.65, on fears over ongoing
high oil prices
EDF down 0.94 or 1.36 percent at 68.01 after a report in French daily Les Echos suggesting the French state is preparing to sell part of its stake in the utility
Most active stocks:
France Telecom; 3.8 million shares traded
Alcatel-Lucent; 2.2 million shares traded
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Frankfurt
German shares TFN market data at 10:22 a.m.
DAX - up 45.90 points, or 0.65 percent, at 7,079.74
MDAX - up 101.71 points, or 1.06 percent, at 9,657.53
TecDAX - down 3.46 points, or 0.41 percent, at 836.75
DAX futures - up 24.50 points, or 0.35 percent, at 7,097.50
MAJOR GAINERS:
RWE shares up 1.70 euros, or 2.08 percent, at 83.30 after UBS upgraded its stance on the utility to 'buy' from 'neutral' and lifted its price target to 115 euros per share from 87.
Deutsche Telekom up 0.17 euros, or 1.59 percent, at 10.89
EON up 1.80 euros, or 1.36 percent, at 134.46, also benefiting from the bullish note from UBS in which it said it still prefers EON over RWE based on a better power generation mix, greater strategic clarity and little risk to stockholders.
Siemens up 0.93 euros, or 1.29 percent, at 73.00, after it sold five business parks to Dawnay, Day Sirius Ltd for 98 million euros. Bayer up 0.56 euros, or 0.99 percent, at 56.96
MAJOR DECLINERS:
Infineon down 0.55 euros, or 8.80 percent, at 5.70, after the German chipmaker said it expects revenues in its communications unit in the third quarter to be about flat from the previous quarter and expects EBIT for the unit to suffer accordingly.
Volkswagen down 2.53 euros or 1.39 percent lower at 179.69, after Deutsche Bank downgraded its stance on the automaker to 'sell' from 'hold' saying they trade at an unjustified bid premium.
Deutsche Post down 0.27 euros or 1.32 percent at 20.15 as pressure on the stock continues after the mail carrier announced an agreement with United Parcel Service Inc. Wednesday to help bolster its failing U.S. operations which disappointed investors, who had been expecting more.
Adidas, down 0.25 eur or 0.54 percent at 46.23
Deutsche Boerse down 0.57 euros or 0.61 percent at 92.40
OTHER STOCK IN THE NEWS:
TecDAX-listed Solarworld down 1.37 euros or 4.31 percent at 30.42, after Merrill Lynch cut its rating on the company to 'sell' from 'neutral'.
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Milan
Milan shares TFN market data at 9.50 a.m.; Oil stocks, Atlantia rebound
Main indices:
Mibtel at 25,347 points, up 0.28 percent
S&P/Mib at 32,852 points, up 0.29 percent
Main S&P/Mib gainers
Tenaris up 1.80 percent at 19.42 euros
Saipem up 1.55 percent at 29.47 euros, rebounding after Wednesday's weakness Eni up 1.01 percent at 26.11 euros
Atlantia up 1.00 percent at 23.21 euros after the lower house of parliament Wednesday approved a government amendment which paves the way for the clearing of last October's tariff convention between the group and motorway agency ANAS
Fiat up 0.68 percent at 14.60 euros. Wednesday, Moody's raised Fiat's long-term senior unsecured ratings to 'Baa3' from 'Ba1' and all short-term ratings to 'Prime-3' from 'Not Prime', citing the group's continued strong financial performance despite a more challenging competitive landscape and the economic weakening in some markets
Main S&P/Mib losers
Banca Popolare di Milano down 1.88 percent at 6.985 euros
Fondiaria-SAI down 1.31 percent at 23.28 euros
Geox down 0.79 percent at 8.12 euros
Mediolanum down 0.73 percent at 3.54 euros
A2A down 0.70 percent at 2.4725 euros
Other stocks in the news
Mediaset down 0.42 percent at 5.205 euros as the government Wednesday withdrew an amendment that would have frozen the current allocation of television frequencies and allowed the group's Rete 4 channel to continue using its terrestrial analogue band wave until the switchover to digital broadcasting, scheduled for 2012.
Enel up 0.42 percent at 7.195 euros with UBS upping the price target on the stock to 9.50 euros from 9.0 euros and keeping its 'buy' stance.
Forex
London 0749 GMT Tokyo 1.00 p.m. (0400 GMT)
U.S. dollar
yen 104.98 up from 104.84
Swiss franc 1.0412 up from 1.0390
Euro
U.S. dollar 1.5600 down from 1.5634
yen 163.78 down from 163.94
Swiss franc 1.6246 down from 1.6248
pound 0.7908 up from 0.7902
Pound
U.S. dollar 1.9729 down from 1.9780
yen 207.14 down from 207.32
Swiss franc 2.0546 down from 2.0551
Australian dollar
U.S. dollar 0.9614 up from 0.9595
pound 0.4871 up from 0.4851
yen 100.91 up from 100.61
