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London market
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London shares close higher as Reuters, Northern Rock offset weak NY
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Leading shares ended higher as bullish numbers from Northern Rock and Reuters offset a
weak start on Wall Street and poorly received results from drug giant GlaxoSmithKline,
dealers said.
At the close, the FTSE 100 was 25.9 points firmer at 5,877.1, with the broader
indices mixed.
However, volume remained pitiful, with just 2.4 bln shares changing hands in 342,926
deals.
Meanwhile, Wall Street was lower in early deals as investors cashed in recent gains
following disappointing earnings from Boeing and Amazon. Investors were also cautious ahead
of the release of Fed's Beige Book this evening.
By London's close the DJIA was off 28 at around 11,070.
Back in London, Northern Rock was the top blue chip performer, up 81-1/2 pence at
1,128, after the mortgage bank reported a 13.3 pct hike in interim profits to 293.9 mln stg
and raised guidance.
In response, Teather & Greenwood upped its stance to 'buy' from 'hold' while Cazenove
reiterated its 'outperform' stance and said overall, the results are slightly ahead of its
estimates and consensus.
Cazenove added the raised guidance for profit growth from 10-20 pct to 15-25 pct suggests
20 pct earnings growth in the medium term.
Reuters was another winner, 19-1/4 firmer at 396-3/4, after the information
provider raised its full year growth targets after reporting interim results that topped
expectations.
The group now expects to deliver revenue growth of between 5-6 pct in 2006, from a
previous 5 pct target, while the interim dividend was upped to 4.1 pence per share from 3.85
pence last year, the first such increase in five years.
Seymour Pierce upgraded Reuters to 'outperform' from 'hold' and said the company's
bullish guidance was a vindication of the 'Core Plus' growth plan it launched last year.
And Reckitt Benckiser gained 61 at 2,155 supported by news WestLB has hiked its
price target to 2,220 pence from 2,150 and raised estimates following recent results from the
household products group.
In retail, Morrison Supermarkets took on 4 at 204 after SG Securities lifted the
grocer to 'buy' from 'sell' and Tesco added 6 to 363-1/2 after the same broker raised its
stance to 'hold' from 'sell'.
SG Securities said it believes UK supermarkets are reaching the beginning of the end of
the price war that has destroyed value in the sector for the last two years.
Still in the sector Boots firmed 13-1/2 at 779-1/2 and Alliance Unichem rose 17 at
1,035 as the two companies' well documented merger looms ever closer.
Elsewhere, PartyGaming firmed 3-1/4 at 109 as the initial panic over the
BETonSPORTs scandal in the US faded and amid growing expectations the bill in the US to ban
online gaming will not win approval before the Senate goes into recess on Aug 4.
Second-line peer 888 gained 12-1/2 at 161 in sympathy.
And Smith & Nephew took on 12 at 432 and Centrica added 6-1/2 at 292-1/2 ahead of
results tomorrow.
On the downside, GlaxoSmithKline fell 23 at 1,507 after the drug maker's second
quarter results and raised guidance failed to live up to expectations.
Pretax profits grew to 1.90 bln stg from 1.66 bln, with earnings up 15 pct to 23.3 pence
compared to a consensus of 1.94 bln and 23.6 pence respectively.
Referring to the outlook, Glaxo said it now expects about 12 pct growth in earnings per
share this year against previous guidance of 10 pct, but again most analysts had expected a
hike closer to the mid-teens level.
ITV was another casualty, down 2-1/4 at 98-1/4 as bid speculation, which was
strengthened by UBS earlier in the week, eased.
Instead talk continued to concentrate on who will replace CEO Charles Allen on his
departure.
Fellow faller Vodafone was off 1/4 at 115-1/2 as the telecom giant continued to
get to grips with a shakeup caused by 15 pct of shareholders wanting to witness the exit of
CEO Arun Sarin.
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On the second line, Colt Telecom Group was the top riser, gaining 6-3/4 pence to
127-3/4 after being upgraded to 'buy' from 'sell' at Goldman Sachs.
The broker noted that the upgrade follows a sharp fall in the share price, pointing out
that since July 6, when it added Colt to its 'sell' list, the stock has fallen over 31 pct on
an absolute basis.
Meanwhile, shares in Rightmove found favour, 7 higher at 292 after the estate
agency said it intends to discontinue its investment in Home Information Packs (HIPs).
Buyers also came to CSR, up 42 at 1,135 following a positive update alongside
strong first half results, leading Panmure Gordon to up the stock to 'buy' from 'hold' with
an increased price target of 1,280 pence from 1,200.
Still in the sector, Wolfson Microelectronics benefited from forecast-busting
interim profits, prompting Bridgewell to up its stance to 'overweight' from 'neutral'.
Panmure Gordon also upped its stance to 'buy' from 'hold', with a revised price target
of 460 pence from 450. Shares took on 10 at 419.
And Autonomy shares climbed 6 to 415 as the software group turned in the highest
profits and revenues in its history for the six months to June 30.
Profit before tax and goodwill jumped to 27.95 mln usd for the half-year from 8.17 mln
the prior year.
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Paris market
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Paris shares close slightly higher on mixed H1 reports; Peugeot plunges
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The main CAC-40 index closed 18.19 points or 0.37 pct higher at 4,933.12, on
volume of 2.85 bln eur. Of the CAC-40 shares, 23 finished higher and 16 were lower. Arcelor
was still withdrawn from the index, following its merger with Mittal Steel.
On the Matif, August CAC-40 futures were trading up 15.0 points or 0.30 pct at 4,940.5. On
the broader indices, the SBF-80 index closed 34.90 points or 0.64 pct higher at 5,449.
33, while the SBF-120 closed 14.67 points or 0.41 pct higher at 3,559.65.
Cap Gemini made the biggest rise of the French blue chips, gaining 0.79 eur or
2.04 pct to close at 39.50, benefiting from an upgrade to 'buy' from 'hold' by Citigroup.
ndex heavyweight Total finished the session up 0.80 eur or 1.55 pct at 52.55,
still supported by yesterday's 'outperform' endorsement of the share compared with its sector
peers by Exane BNP Paribas.
PPR was up 1.50 eur or 1.48 pct at 103.00 before the release of its first-half
sales tomorrow morning. Credit Agricole rose 0.44 eur or 1.45 pct to close at 30.86,
after the bank was the only bidder for Greek's Emporiki Bank.
LVMH rose 0.85 eur or 1.11 pct to close at 77.55, adding to yesterday's rise on
the back of a solid gain shown in first-half sales that matched or exceeded analysts'
expectations.
EADS shares closed 0.10 eur or 0.48 pct at 21.12 ahead of tomorrow's earnings
update. Air Liquide gained 0.60 eur or 0.39 pct to 152.80, after it showed largely
in-line second-quarter sales and maintained its full-year guidance on net profit.
Renault was up 0.25 eur or 0.31 pct at 82.10, supported by better-than-expected
sales figures from General Motors, with whom Renault is exploring the possibility of an
industrial alliance.
On the downside, Peugeot plunged 4.61 eur or 10.11 pct to 41.09, after it reported
first-half net profits down 59.7 pct to 303 mln eur, amid declining sales in Western Europe
and higher-than-expected costs for raw materials and internal restructuring, and cut its
forecast for full-year operating margin to 2.4 pct from 2.8 pct.
Analysts had expected Peugeot to have poor first-half results, but the 2.4 pct margin was
at the low end of their range.
STMicroelectronics dropped 0.37 eur or 3.08 pct to 11.63, after it reported
broadly in-line second-quarter results last night, but the guidance given for the rest of the
year disappointed analysts and prompted Oddo Securities to cut its recommendation for the
stock to 'reduce' from 'add'.
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Frankfurt market
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German shares close higher as oil prices fall and TUI shines
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At close the DAX 30 index was 17.34 points or 0.31 pct higher at 5,583.10, having
moved between 5,555.45 and 5,596.19 so far this session.
The MDAX was at 7,721.74, up 5.31 points or 0.07 pct, while the TecDAX was at
613.98, down 1.82 points or 0.30 pct. The DAX futures contract was at 5,606.50, down 22.50
points, while bund futures were at 116.20, down 0.18.
Meanwhile, the Ifo institute said its business climate index for Germany fell to
105.6 in July from 106.8 in June, a worse-than-expected decline, as sentiment in the
manufacturing and retailing sectors worsened.
Henkel added 2.26 eur or 2.52 pct to 91.90, leading large-caps higher.
ThyssenKrupp rose 0.61 eur or 2.35 pct to 26.53 and Linde followed gaining 1.14 eur or
1.79 pct to 64.99.
TUI gained 0.25 eur or 1.63 pct to 15.61, amid vague market talk that AP
Moeller-Maersk is interested in making a takeover bid for the German shipping and tourism
giant, or for its shipping unit.
Both Moeller-Maersk and TUI declined to comment on the talk.
Deutsche Post, up 0.17 or 0.89 pct at 19.22, recovered from yesterday's losses,
having closed down 2.51 pct after US peer UPS reported a disappointing set of second-quarter
results and issued guidance that did not please the market.
Financials were also a solid feature with Deutsche Bank up 0.82 eur ot 0.93 pct to
88.60 and Commerzbank gaining 0.20 eur or 0.75 pct to 26.86.
Insurance Giant Allianz rose 0.58 eur or 0.48 pct to 121.58, while the world's
second-largest reinsurer Munich Re climbed 0.35 or 0.33 pct to 106.75.
At the other end of the market, Infineon lost 0.20 or 2.36 pct to 8.27.
Deutsche Lufthansa fell victim to late session profit-taking, ending down 0.15 eur
or 1.02 pct to 14.61 after climbing as high as 14.80 shortly after the airline published
solid preliminary second quarter figures, dealers said.
The airline's operating profit rose to 297 mln eur from 253 mln in the same period last year,
beating the 252 mln consensus forecast from analysts polled by AFX News.
BMW and Volkswagen slid 0.19 or 0.49 pct to 38.65 and 0.38 or 0.69 pct to
54.64 respectively, as Peugeot slumped in Paris after reporting a much-weaker-than-expected
set of first-half numbers and warning that second-half margins would only match levels seen
in the first half.
However, DaimlerChrysler, which together with VW reports second quarter and
first-half results tomorrow, was up 0.11 or 0.28 pct at 39.16.
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Amsterdam market
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Amsterdam shares close higher, led by strong oil, chemicals stocks
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The AEX closed 2.33 points or 0.52 pct up at 446.38 after trading in the range of
444.56-447.22. Government bonds traded broadly down while the euro stood at 1.2612 usd versus
1.2577 usd late yesterday.
Royal Dutch Shell climbed 1.60 pct to 27.36, with the oil giant due to post
second-quarter earnings tomorrow, while second-liner Fugro put on 1.31 pct to 33.37.
Oil-services group SBM Offshore was up 1.18 pct at 21.45 eur.
Akzo Nobel lifted 1.41 pct to 43.12 eur, while DSM added 1.40 pct to 33.99
ahead of tomorrow's second-quarter earnings. Second-liner chemicals transportation company
Univar added 1.96 pct to 36.96 eur.
Philips rose 1.17 pct to 25.09 eur, while TomTom added 0.94 pct to 29.02 eur after
an upgrade to 'hold' from 'sell' at ING, although the Dutch brokerage lowered its price
target to 29 eur from 32.30.
Buhrmann, due to release second-quarter figures on Aug 2, rose 1.26 pct to 10.45
eur. TNT was up 1.03 pct at 27.45.
Vedior rose 0.62 pct to 16.16 eur, with the staffing group expected to post upbeat
second-quarter results tomorrow, as analysts look to the French market to show increased
sales growth.
Peer Randstad was up 1.30 pct at 46.05, ahead of second-quarter figures due out on
Friday.
It was a mixed day for financials, with Fortis rising 0.37 pct to 27.26 and
ING gaining 0.16 pct to 30.77. Aegon lost 0.15 pct to 13 eur, while
ABN Amro slipped 0.09 pct to 21.30.
Main decliners included KPN, down 0.91 pct at 8.72 eur and ASML Holding,
off 0.80 pct at 14.92. Second-liner Pharming lost 2.71 pct to 3.23 pct, while
Heijmans lost 1.17 pct to 38.12 eur.
Local stock Exact fell 2.13 pct to 23 eur after the software developer revealed
that its chief financial officer will step down on Aug 1 for personal reasons.
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Forex Sterling Exchange Rates
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Day's Spread |
Market Rate
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| USA 1.8390 |
1.8476 |
1.8458 |
1.8463 |
| Canada 2.0893 |
2.1058 |
2.1020 |
2.1024 |
| Denmark 10.8991 |
10.9316 |
10.9161 |
10.9181 |
| Norway 11.5774 |
11.6772 |
11.6063 |
11.6153 |
| Sweden 13.4994 |
13.5536 |
13.5336 |
13.5461 |
| Japan 214.67 |
216.23 |
216.02 |
216.07 |
| Switzerland 2.3019 |
2.3080 |
2.3067 |
2.3072 |
| Euro 1.4610 |
1.4647 |
1.4630 |
1.4632 |
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