ADVFN III Morning Euro Markets Bulletin
Daily world financial news from Thomson Financial News Supplied by advfn.com
19 Jun 2008 09:49:38
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London
London shares flat early on as weakness among banks offset oil gains
At 9:04 a.m. the FTSE 100 index was off 1.7 points at 5,755.2, having closed down 105.0 points at 5,756.9 Wednesday, while the FTSE 250 index was down 101.4 points at 9,433.4.
Wall Street sank Wednesday for the second straight day on renewed concerns about the financial sector and FedEx Corp.'s warning that weakening demand and surging fuel costs would weigh on its profits in the coming year.
All three major stock indexes finished lower, as oil and bond prices jumped. The DJIA fell 131.24 points to 12,029.06, the S&P 500 index dropped 13.12 points to 1,337.81, and the Nasdaq composite index fell 28.02 points to 2,429.71.
In Asia, the mood was also subdued, with the Hang Seng index ending its morning down 432.69 points at 22,893.11, and the Nikkei 225 index closing down 322.65 points at 14,130.17.
In London, weakness among banks weighed on the FTSE 100. HBOS was the worst off, down 12-3/4 pence at 306, with Barclays falling 8-1/2 pence to 317-3/4, Alliance & Leicester, down 8 pence at 314-3/4, and Lloyds TSB, off 8 pence at 33-1/4.
"The banks are down after some weakness in U.S. financials overnight, and although news from HBOS was broadly reassuring, it did talk about house prices being down about 9 percent over the course of this year, which is more than they said a few months ago," said Keith Bowman from Hargreaves Landsdown.
A rise in oil price Wednesday translated into weakness among big fuel users, with cruise operator Carnival slipping 58 pence to 1,665, British Airways down 6 pence at 219-3/4, and midcap easyJet shedding 11 pence to 290-3/4.
Conversely, oil stocks were in demand, tracking the oil price gains, and after a European Energy sector review from Goldman Sachs, in which the broker increased its oil price forecasts to reflect a continued tightening of global crude oil supply/demand fundamentals and the resulting higher oil prices.
Cairn Energy, which Goldman Sachs upgraded to 'buy' from 'neutral' was the top FTSE 100 riser, up 112 pence at 3,334, with Royal Dutch Shell adding 16 pence to 2,031-1/2, BP adding 5 pence to 584-3/4, and BG Group, helped by a Sanford Bernstein upgrade to 'outperform' from 'market perform', taking on 27 pence to 1,261.
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Meanwhile, Cadbury added 4 pence to 629, after the group's trading statement which, as anticipated, pointed to the group's ongoing strong performance.
Earlier, the confectionery group said its first like-for-like revenue growth is expected to be above its 4-6 percent target range after it said its second quarter performance was modestly higher than the 7 percent growth reported for the first quarter.
Citigroup said the trading update was largely 'as expected' and said Cadbury looks well positioned for a strong full-year performance and margin progression materially in excess of 100 basis points. Also gaining after a trading statement was Centrica, adding 2 pence to 308, after the UK energy supplier said that it continues to trade in line with the guidance provided in its Interim Management Statement on May 12.
In its update, Centrica added no further information to the interim statement which said that overall operating profit in the first half would be slightly lower because of lower profits in its retail business.
Meanwhile, Vodafone ticked up 0.6 pence to 150.7. The company has pulled out of the Tiscali auction because of a disagreement over the Italian Internet company's valuation, say people close to the deal, according to the Financial Times.
On the second tier, a bullish trading update propelled Go-Ahead to the top of the leaderboard, up 9 percent or 137 pence at 1,660, with the train and bus operator saying its expectations on its prospects for the full year are ahead of April's view. Citigroup repeated its 'buy' recommendation and said it would lift its earnings estimates for both the current year and 2009.
Elsewhere, GW Pharmaceuticals took on 4 pence to 51-3/4, after the company, which develops cannabinoid medicines, said its first-half pretax loss narrowed sharply as revenues rose on the back of the company's agreements with Otsuka.
Meanwhile, strength was seen from Redrow and Bovis Homes, as Citigroup lifted its ratings on the companies to 'buy' from 'sell', and to 'hold' from 'sell', in a review of the UK housebuilding sector in which the broker said the near-term looks ugly, but there are opportunities for longer-term investors.
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Redrow took on 6-1/4 pence to 144, and Bovis Homes added 1-1/4 pence to 344. A broker upgrade also provided the impetus for a rise in Pennon's share price, up 16-1/2 pence to 640-1/4, as Morgan Stanley lifted its rating to 'overweight' from 'equal-weight', while raising its price target to 730 pence from 645 pence, as it reviewed its water utilities coverage.
In the note, the broker said it thinks UK regulated utilities should provide a safe haven and perform well as inflation persists.
Elsewhere in the sector, Severn Trent added 2 pence to 1,361, despite being downgraded by Morgan Stanley to 'equal-weight' from 'overweight', following the stock's good performance since its full-year results earlier this month.
On the macro front, May retail sales are predicted to have held up despite the prevailing gloom, with no change seen between May and April. The annual rate is seen at a 4.2 percent rise in May. April saw a monthly fall of 0.2 percent but an annual gain of 4.2 percent. Public finances for May are seen weakening after a strong start to the fiscal year in April, in figures released tomorrow.
PSNB is seen at 9.5 billion pounds in May after a 9.0 billion pound reading in the same month the previous year. PSNCR is seen growing to 7.0 billion from 6.0 billion in May 2007. Also due out Thursday is UK May provisional M4/M4 lending, and UK CML May mortgage lending.
In the U.S., the Labor Department will release its weekly jobless claims numbers Thursday. The number of people filing first-time claims for unemployment insurance is expected to total 375,000 in the week ending June 14.
That is below the 384,000 reported in the previous week. The number of individuals continuing to file claims for unemployment is expected to total 3.150 million in the week ending May 31. That is above the previous week's over four year high of 3.139 million. The Philadelphia Fed survey of manufacturing conditions is expected to improve in June, to a level of -10.0 from -15.6 in the previous week.
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Milan
Milan shares TFN market data at 9:24 a.m.: Tiscali slumps; Prysmian, Tenaris up
Main indices:
Mibtel at 23,520 points, down 0.34 percent
S&P/Mib at 30,366 points, down 0.32 percent
Main S&P/Mib losers
Seat Pagine Gialle down 4.08 percent at 0.0822 euros, a record low. Since the start of the year the share has lost almost 66 percent of its value
Gruppo Editoriale l'Espresso down 2.61 percent at 1.645 euros
Finmeccanica down 2.24 percent at 17.08 euros
Mediolanum down 2.11 percent at 2.9975 euros
Telecom Italia down 1.54 percent at 1.28 euros
Main S&P/Mib gainers
Prysmian up 1.19 percent at 17.30 euros
Tenaris up 1.13 percent at 20.16 euros
Terna up 0.53 percent at 2.84 euros
Saipem up 0.29 percent at 27.85 euros
Snam Rete Gas up 0.47 percent at 4.28 euros
Other stocks in the news
Tiscali down 6.61 percent at 2.0975 euros, returning to lows not seen since April, after reports that Vodafone had abandoned the auction to buy the Italian Internet service provider on a disagreement over its valuation
Alleanza down 0.20 percent at 7.385 euros. Daily Il Sole 24 Ore quoted the insurer's chairman Amato Luigi Molinari as saying that the insurer's new premiums rose at a double digit rate in the first five months of the year
Generali down 0.24 percent at 25.07 euros. Generali controls Alleanza
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Paris
Paris shares TFN market data 10.30 am; shares lower on high oil prices
Major indices:
CAC-40 down 20.33, or 0.44 percent, at 4,603.43
SBF-80 down 59.27, or 1.09 percent, at 5,357.25
SBF-120 down 17.99, or 0.54 percent, at 3,338.95
6 CAC-40 stocks up
34 CAC-40 stocks down
Major gainers:
Vallourec, up 5.36 or 2.66 percent at 205.61, benefiting from high oil prices Total, up 0.17 or 2.27 percent at 52.76 after upgrade to 'buy' from 'neutral', addition to Goldman Sachs' conviction buy list EDF up 0.78 or 1.25 percent at 63.24
Major losers:
EADS, down 0.35 or 2.58 percent at 13.20 after the U.S. GAO upheld Boeing's protest at the award of a U.S. Air Force contract for 179 tanker aircraft to EADS and Northrop Grumman
Unibail-Rodamco, down 5.47 or 3.51 percent at 150.24 after UBS downgrade to 'neutral' from 'buy' Renault, down 2.01 or 3.53 percent at 54.88 and Peugeot, down 0.97 or 2.66 percent at 35.55 as high oil prices weigh on automobile stocks
Most active stocks:
Credit Agricole, down 0.27 or 2.03 percent at 13.04; 6.3 million shares traded Total, 2.7 million shares traded
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Amsterdam
Amsterdam shares TFN market data at 10.02 a.m. - lower
MAJOR INDICES
AEX 448.27 points, down 2.30 points or 0.51 percent
AMX 623.75 points, down 9.78 points or 1.54 percent
Government bonds mainly higher
MAJOR DECLINERS
Property stock Unibail-Rodamco led blue chips lower, off 3.69 percent at 149.90 euros, after UBS cut the group to 'neutral' from 'buy'
Heineken fell 2.86 percent to 33.57 euros
Fortis was off 1.52 percent at 12.97 euros on reports it is mulling the sale of its 49 percent stake in Chinese investment bank ABN Amro Teda
Midcap issue CSM dropped 2.02 percent to 24.26 euros. Petercam downgraded its rating on the stock to 'hold' from 'buy', but upped its target to 30 euros from 28.50
MAJOR GAINERS
Unilever gained 1.33 percent to 19.47 euros after saying it has agreed to sell its Ivory Coast edible oil business together with its interests in local oil palm plantations Palmci and PHCI
ASMI added 0.38 percent to 21.0 euros. Company founder Arthur del Prado met privately with Applied Materials in April, apparently encouraging the company to make a bid for certain front-end operations. The bid upped the value of these operations in the eyes of the market, helping in the fight against activist shareholders, Dutch daily Het Financieel Dagblad reported on Thursday
Shell climbed 0.98 percent to 25.80 euros. The oil producer said it has shut down production at a Nigerian oil field that produces about 200,000 barrels per day after a militant attack.
Forex
London 0756 GMT Hong Kong 0500 GMT
London 0756 GMT Hong Kong 0500 GMT
U.S. dollar
yen 107.59 down from 107.67
Swiss franc 1.0377 up from 1.0336
Euro
U.S. dollar 1.5539 down from 1.5561
pound 0.7920 down from 0.7942
yen 167.20 down from 167.56
Swiss franc 1.6125 up from 1.6096
Pound
U.S. dollar 1.9616 up from 1.9599
yen 211.05 up from 210.93
Swiss franc 2.0354 up from 2.0256
Australian dollar
U.S. dollar 0.9465 down from 0.9471
pound 0.4827 down from 0.4830
yen 101.82 down from 101.91
