ADVFN III Morning Euro Markets Bulletin
Daily world financial news from Thomson Financial News Supplied by advfn.com
10 Jul 2008 09:53:18
London
London shares tumble in early trade after US slump; BoE decides on rates
LONDON - Leading shares opened sharply lower after Wall Street slumped late on Wednesday, with Associated British Foods slipping after a trading statement, with traders eyeing the Bank of England's monthly announcement at 12 noon which is likely to see the base rate held at 5 percent.
At 8:59 a.m., the FTSE 100 was down 93.8 points at 5,435.8, having risen 89.1 points to close at 5,529.6 on Wednesday. The FTSE 250 index was down 140.3 points at 8,514.3.
Wall Street tumbled on Wednesday as investors grappled with renewed worries about the soundness of the financial sector.
The Dow Jones Industrial Average fell 236.77, or 2.08 percent, to 11,147.44 a day after rising more than 150 points.
The Standard & Poor's 500 index fell 29.01, or 2.28 percent, to 1,244.69, while the Nasdaq composite index fell 59.55, or 2.60 percent, to 2,234.89.
The pullback again left the indexes in bear market territory, having logged declines of more than 20 percent since their October highs.
In Asia this morning, Japan's Nikkei 225 closed 15.08 points, or 0.1 percent, higher at 13,067.21. Hong Kong's Hang Seng finished its morning session up 172.15 points, or 0.8 percent, at 21,977.96, as investors snapped up Chinese banks on hopes of better first-half earnings.
Back in the UK, the Bank of England will announce its monthly decision on the base rate. The Monetary Policy Committee is likely to hold the rate at 5 percent, according to most pundits.
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The Bank is having to balance the need to keep inflation in check against the need to avoid a recession. Inflation was 3.3 percent in the year to May, compared with the Bank's target of 2 percent. On the other hand, the downturn in the housing market and on the High Street suggests that the next move in rates may be downwards.
In company news, Associated British Foods was 35 pence lower at 733 despite a mostly upbeat third-quarter trading statement. Sales at discount clothing retailer Primark were up 14 percent on the same period last year.
But it warned profits in its sugar division will continue to be impacted by European Union regime reform, with currency having a positive effect in the year due largely to the continued strength of the euro against sterling.
London Stock Exchange was 53 lower at 687, giving back some of the gains from Wednesday, when it reported sharply higher revenues.
B&Q owner Kingfisher fell 4.5 to 100 to after Goldman Sachs added it to its
'Pan-Europe sell list'. The broker, extremely downbeat on retailers, said the company had high exposure to France and big ticket items, a leveraged balance sheet and an unattractive valuation.
Next, which was downgraded to 'neutral' from 'buy' by the same broker, fell 31-1/2 to 869. Goldman cut midcaps Debenhams, Signet and Burberry, to 'sell' from 'neutral', and the shares fell 5 to 29-3/4, 2 to 45-1/4 and 22 to 407-1/2 respectively.
Among the few FTSE 100 risers, credit checking company Experian Group was up 10-3/4 at 372 after it said revenue was up 21 percent in the three months to June.
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Among the midcaps, Barratt Developments was up 9-1/4, at 63-1/4, extending gains from Wednesday, as it reported weaker trading but gave welcome news of breathing space on its debt position
The company said it had agreed, subject to final documentation, a restructuring of its covenant package with its banks and private placement note providers well in advance, as an appropriate, prudent response to current market conditions.
Specifically, under this agreement, the interest cover covenant is replaced with a cashflow covenant and the gearing and minimum tangible net worth covenants are relaxed.
The housebuilder said underlying private selling prices, referring to to those not classified as social housing, fell 5 percent in the year to June. The company is cutting 1,200 jobs.
Rivals gained. Taylor Wimpey rose 3-1/4 pence to 33-1/2. Bovis Homes rose 3-1/4 to 326-1/4.
On the downside, F&C Asset Management was 29-1/4, or 21.6 percent lower, at 106-1/2, on talk of a major placing of shares.
Sports Direct International was 4 lower at 67-3/4 after the sports retailer reported a 29.9 percent slump in full year underlying earnings and said it does not expect earnings to grow in its new financial year.
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Paris
Paris shares TFN market data at 10.05 a.m.; Carrefour falls as sales disappoint
Major indices:
CAC-40 down 73.86 points or 1.70 percent at 4,265.80
SBF-80 down 93.29 or 1.90 percent at 4,778.64
SBF-120 down 54.26 or 1.73 percent at 3,080.89
Major gainers:
Thomson SA up 0.29 or 10.32 percent at 3.10 after releasing a trading update predicting a smaller than expected decline in second half sales and that it expects to meet the terms of financial covenants
Major losers:
EADS down 0.16 or 1.32 percent at 11.93 after the Pentagon confirmed it is reopening a competition to supply tankers to the U.S. Air Force, scrapping the $35 billion contract it won with partner Northrop Grumman in February
Carrefour down 2.85 or 8.27 percent at 31.60 after disappointing first half sales and a downgrade by Cazenove Danone down 3.13 or 6.98 percent at 41.69 after major customer Carrefour said name brand sales volumes fell
Most active stocks:
Carrefour; 2.93 million shares traded Alcatel-Lucent, down 0.08 or 2.11 percent at 3.72; 2.50 million shares
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Frankfurt
German shares TFN market data at 10:29 a.m.
DAX, down 59.74 points, or 0.94 percent, at 6,326.72
MDAX, down 84.95 points, or 0.98 percent, at 8,576.37
TecDAX, down 12.43 points, or 1.68 percent, at 726.40
DAX futures, up 39.00 points, or 0.62 percent, at 6,379.00
MAJOR DECLINERS
Continental, down 1.74 euros, or 2.88 percent, at 58.76, Infineon, down 0.30 euros, or 2.70 percent, at 4.690 as the chipmaker's stock corrected from recent gains and came under pressure from losses on tech
stocks in the U.S. over night
Henkel, down 0.62 euros or 2.42 percent, at 24.95, as shares in the household goods company saw their recent gains evaporate ThyssenKrupp, down 0.77 euros, or 2.22 percent at 33.88
Hypo Real Estate, down 0.31 euros, or 1.87 percent, at 16.25, as the worst of several hard-hit financials after investors's worries last night on Wall Street over prolonged fallout from the credit crisis sent financial titles to the bottom of the indices.
MAJOR ADVANCERS
Commerzbank, up 0.35 euros, or 1.82 percent, at 19.56, as the bank bucked Thursday's negative trend in the financial sector
Fresenius Medical Care, up 0.43 euros, or 1.22 percent, at 35.71 as trader said investors were looking to the stock defensive characteristics
Merck, up 0.08 euros, or 0.10 percent, at 82.08
Allianz, up 0.24 euros, or 0.21 percent, at 112.77
OTHER STOCK IN THE NEWS
TecDAX-listed Versatel, down 0.32 euros, or 2.24 percent, at 13.95, after Goldman Sachs downgraded its stance to 'sell' from 'neutral' and reduced its price target to 13.3 euros per share from 15.5.
MDAX-listed Heidelberger Druckmaschinen, down 0.96 euros, or 7.20 percent at 12.37, after the printing-machine specialist reported figures for the first quarter of its 2008/09 business year that show an operating loss and a gloomy near-term outlook.
MDAX-listed Tognum, down 1.31 euros, or 7.88 percent, at 15.31, after Deutsche Bank downgraded its stance on to 'hold' from 'buy' and cut its price target recommendation to 18.5 euros per share from 24. MDAX-listed Suedzucker, up 0.22 euros, or 1.95 percent, at 11.50
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Milan
Milan shares TFN market data at 9.46 am; Impregilo outperforms
Main indices
Mibtel at 21,932, down 1.23 pct
S&P/Mib at 28,459, down 1.08 pct
Main S&P/Mib gainers
Luxottica down 3.42 percent at 14.29 euros after Deutsche Bank cut rating to 'hold' from 'buy' Atlantia down 3.19 percent at 18.41 euros
Seat PG down 2.38 percent at 0.069 euros as UBS cut to 'neutral' from 'buy' L'Espresso down 2.59 percent at 1.47 euros on weak publishing sector Lottomatica down 2.03 percent at 19.35 euros after reports of mistakes at Kansas lottery that could impact concession renewal
Intesa Sanpaolo down 0.49 percent at 3.65 euros after Cheuvreux raised to 'outperform' vs 'underperform'
Main S&P/Mib gainers
Impregilo up 6.18 percent at 3.43 euros after being suspended limit up
Other stocks in news
Benetton down 3.91 percent at 6.81 euros after Goldman Sachs removed it from Buy list Tiscali down 6.63 percent at 1.77 euros after denying reports its sale could be decided by mid-August
Forex
London 0828 GMT London 0300 GMT
U.S. dollar
yen 107.12 up from 106.78
Swiss franc 1.0311 up from 1.0289
Euro
U.S. dollar 1.5715 down from 1.5723
pound 0.7954 up from 0.7935
Swiss franc 1.6205 up from 1.6182
yen 168.38 up from 167.90
Pound
U.S. dollar 1.9758 down from 1.9811
yen 211.67 up from 211.54
Swiss franc 2.0366 down from 2.0387
Australian dollar
U.S. dollar 0.9590 down from 0.9594
pound 0.4854 up from 0.4842
yen 102.73 up from 102.45
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