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London market
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London shares fall back in early deals with Unilever, ICI off after figs
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Leading shares fell back in early deals, with post-results losses in Unilever and ICI, a
weak oil sector and caution ahead of the BoE's rate decision at midday all knocking
sentiment, dealers said.
By 09.10, the FTSE 100 index was down 24.8 points at 5,906.3, while the broader
indices were also under pressure.
US stocks closed higher on Wall Street last night as investors put their interest rate
worries on hold and welcomed strong earnings reports from Time Warner and Procter & Gamble
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The DJIA ended 74.20 points higher at 11,199.93, while the Nasdaq finished
16.82 points up at 2,078.81.
Overnight across Asia, the Nikkei 225 index closed up 6.08 points at 15,470.35,
while the Hang Seng was up 2.24 points at 17,034.99 at midday.
Oil prices eased slightly in Asian trade, falling back after yesterday's sharp gains,
although the escalating conflict in the Middle East and the threat of an incoming storm in
the Gulf of Mexico continued to cause concern.
September crude eased 36 cents to 75.45 usd per barrel on Nymex.
Oil stocks fell back in London, with BP down 6 pence to 656, Royal Dutch Shell
off 14 pence to 1958 and BG Group dropping 4-1/2 pence to 725-1/2.
Unilever however, was the day's biggest loser, falling 52 pence to 127, over 4
pct, as its in-line second quarter results gave investors an excuse to take profits after
recent gains.
Merrill Lynch reiterated its 'sell' recommendation, noting that although the group's
sales growth of 3.9 pct was slightly ahead of expectations, it remains well below its sector
peers.
ICI was another faller, off 9-1/2 pence at 367-3/4, after 'in-line' results. UBS
retained its 'neutral' recommendation.
Shares in Rio Tinto were also lower in morning deals as ongoing volatility in the
mining sector overshadowed better-than-expected interim numbers from the group.
This morning, the dual-listed Anglo-Australian mining group said underlying first half
earnings, excluding one-off items, rose 80 pct to 3.75 bln aud, topping a market consensus
forecast of a 3.48 bln usd net profit.
In response, Merrill Lynch reiterated its 'buy' advice and said the results were in line
with expectations operationally, with a lower than forecast tax rate driving net income 13
pct higher than it had forecast.
Elsewhere, Vedanta fell 19 pence to 1300, while BHP Billiton eased 4 pence
to 1021 and Lonmin fell 38 pence 2778 after HSBC downgraded the shares to
'underweight' from 'neutral'.
Copper plays edged higher however, amid continuing fears of strike action at Chile's
Escondida mine.
Antofagasta gained 3-3/4 pence to 4276-1/4, while Kazakhmys added 2 pence
to 1257.
Remaining on the upside, Morrison Supermarkets added 12-3/4 pence to 218-1/2 after
the supermarket chain delivered a sales update in-line with analyst expectations.
This morning, the group said like-for-like sales rose 6.6 pct in the 25 weeks to July 23,
while like-for-like sales excluding fuel were up 4.6 pct, compared with expectations of
growth between 4-4.8 pct.
In response, JP Morgan reiterated its 'neutral' stance and described today's
numbers as "strong" and said they which should help the share price this morning.
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Barclays was also in demand, gaining 6-1/2 pence to 634 after the banking giant
reported a better than expected 37 pct increase in first-half profit.
The UK's third-biggest bank by market value, said pretax profit came in at 3.673 bln stg,
up from 2.690 bln stg in the same period last year, and ahead of the 3.400 bln stg consensus
analyst forecast.
In response, Merrill Lynch reiterated its 'buy' advice, as it described the results as
"strong" and said its forecasts are likely to move up.
ITV was higher again, up another 2 pence to 103-1/2, on the back of rumours of a
private equity bid, with talk of CEO Charles Allen's departure also doing the rounds.
PartyGaming meanwhile, added 1-3/4 pence to 111-1/4 on news that it has acquired
online sports betting business Gamebookers for 102 mln eur.
Dresdner Kleinwort reiterated its 'buy' recommendation and 210 pence target.
On the economic front, the Bank of England is poised to keep its key repo rate unchanged
at 4.50 pct for the 12th month running when it concludes its rate-setting meeting today.
The European Central Bank however, is expected to raise interest rates at today's
governing council meeting as it quickens the pace of monetary tightening, economists said.
The ECB is expected to hike its main refinancing rate to 3.00 pct from
2.75 pct, only two months after it last raised rates.
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Paris market
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PARIS - Market data at 10.00 am:
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Major indices:
CAC-40 down 8.56 at 5,017.69
SBF-80 down 22.70 at 5,528.98
SBF-120 down 8.11 at 3,618.44
Volume: 670 mln eur
15 CAC-40 stocks up
24 CAC-40 stocks down
(Arcelor deleted, no replacement yet)
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Major gainers:
Societe Generale up 1.30 at 120.60 on strong Q2 results
Essilor International up 0.55 at 78.35
Axa up 0.13 at 27.52 after strong H1 results
Lagardere up 0.25 at 54.95 on technical bounce
Klepierre up 3.30 at 103.90 upgraded to 'buy' at Merrill Lynch
Euler Hermes up 2.50 at 91.10 as H1 sales rise 5 pct
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Major losers:
Thomson down 0.27 at 12.83, downgraded to 'sell' from 'neutral' by Goldman
Sachs
Total down 0.95 at 51.45 after Q2 results at low-end of market expectations
Capgemini down 0.58 at 40.75
Altran Technologies down 1.03 or 11.41 pct at 8.00, warns on H1 margin
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Frankfurt market
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FRANKFURT - Market data at 10.44 am:
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Major indices:
DAX 30 - 5,637.37, down 43.45 points or 0.76 pct
MDAX - 7,920.47, down 25.83 points or 0.33 pct
TecDAX - 636.20, down 1.71 points or 0.27 pct
DAX future - 5,657.50, down 46.00 points or 0.81 pct
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Major risers/outperformers:
Fresenius Medical Care, up 1.80 eur or 1.88 pct at 97.30, after the company reported
consensus-beating second quarter results and lifted its full-year guidance
Deutsche Boerse, up 0.84 eur or 0.75 pct at 112.18, after the exchange operator last
night reported EBITA and net profit ahead of the most optimistic analyst forecasts, prompting
a target price increase to 124 eur from 122 at WestLB
Allianz, up 0.52 eur or 0.42 pct at 123.80
Infineon, down only 0.01 eur or 0.12 pct at 8.45
Munich Re, down only 0.12 eur or 0.11 pct at 109.48
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Major fallers:
ThyssenKrupp, down 0.51 eur or 1.84 pct at 27.25, after Arcelor late in yesterday's
session said it is "not legally possible" for the combined Arcelor-Mittal group to sell
Canada's Dofasco to ThyssenKrupp as Mittal wishes
BMW, down 0.70 eur or 1.75 pct at 39.22, as WestLB cut its price target on the
issue to 46 eur from 52 eur on the back of concerns over the automaker's outlook
Hypo Real Estate, down 0.60 eur or 1.33 pct at 44.38
Lufthansa, down 0.19 eur or 1.28 pct at 14.70
Commerzbank, down 0.33 eur or 1.18 pct at 27.65, on profit-taking following
yesterday's near 3 pct gains
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Amsterdam market
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Amsterdam shares AFX at a glance outlook
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Company News:
Warburg Pincus, Cinven to buy Dutch Co Essent Kabelcom for 2.6 bln eur.
Unilever posts 33 pct increase in Q2 net income, reconfirms FY targets.
Numico repeats FY guidance after firm Q2 profits, lagging sales.
Imtech to buy mechanical industrial ops of Dutch co A. Hak Industrie.
Aalberts buys 51 pct interest in Polish co KAN, sees immediate EPS contribution.
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Forex
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US dollar |
| yen 114.76 |
up from 114.66 |
| sfr 1.2337 |
down from 1.2340 |
| Euro |
| usd 1.2752 |
up from 1.2747 |
| stg 0.6801 |
down from 0.6806 |
| yen 146.30 |
up from 146.23 |
| sfr 1.5732 |
down from 1.5739 |
| Sterling |
| usd 1.8750 |
down from 1.8772 |
| yen 215.09 |
down from 215.29 |
| sfr 2.3118 |
down from 2.3169 |
| Australian dollar |
| usd 0.7634 |
up from 0.7627 |
| stg 0.4071 |
up from 0.4061 |
| yen 87.600 |
up from 87.490
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