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London market
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London shares ended the session higher as fading prospects of a rate hike in the US next
week added to a buoyant mining sector and a rebound in heavyweight banks, dealers said.
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At the close, the FTSE 100 was 51 points better at 5,889.4, having risen from a
low of 5,836.5, mirroring the wider positive market sentiment.
Volume, though was below par, with 2.2 bln shares changing hands in 325,761 deals.
Meanwhile, Wall Street was firmer in early deals as weaker-than-expected US jobs data
fuelled hopes interest rates may have peaked.
According to the US Labor Department, the total number of non-farm payrolls rose by
113,000 in the month, short of the 135,000 flagged by the market.
By London's close, the DJIA was 55.10 higher at 11,297.
Back in London, miners continued to dominate the leaderboard, boosted by 5 bln stg
buyback news from Anglo American and a spike in commodity prices following today's
US employment data.
Anglo American reported first-half earnings of 1.70 usd per share up from 1.18 usd last
time and in line with the forecast range of 1.61-1.85 usd.
But what really excited investors was the group's 5 bln usd capital return, prompting UBS
to repeat its 'buy' advice.
Sentiment was further boosted by a rally in gold and silver prices as the dollar took a
tumble following the jobless report and on news copper leapt over 5 pct as strike worries in
Chile weighed.
Anglo American added 107 pence to 2,330, while BHP Billiton gained 27 to 1,030, Vedanta
also edged 27 higher to 1,295 and Kazakhmys moved up 30 to 1244.
But, the biggest blue chip riser was Partygaming, up 10 at 120 as the market
continued to welcome yesterday's Gamebookers acquisition.
Panmure Gordon today reiterated its 'buy' recommendation and 225 pence target,
arguing that the on-line gaming group has acquired the mechanism to extract higher value from
its existing and future customers.
Intercontinental Hotels was also in demand, up 22-1/2 pence to 859 following a
bullish note by UBS.
The Swiss-owned broker reiterated its 'buy' recommendation and 1,150 pence target.
Elsewhere, banks bounced back from yesterday's shock UK rate hike, with Alliance &
Leicester adding 21 to 1016, HBOS up 15 at 974, Barclays 16-1/2 firmer at
635-1/2 and Northern Rock 36-1/2 pence to the good at 1125.
And Royal Bank of Scotland reversed earlier losses to end 17 higher at 1736 as
investors warmed to better-than-expected interim results.
The UK's second-biggest bank said pretax profit came in at 4.51 bln stg, up from 3.68 bln
stg in the same period last year, and ahead of the consensus analyst forecast of 4.35 bln
stg.d.
However, the company saw its net interest margin fall to 2.45 pct from 2.5 pct in the
last six months of 2005, held back by a shift towards less profitable forms of lending and an
increase in customer deposits.
On the downside, British Airways remained the biggest casualty, down 13-1/2 at
375-1/2 as comments it expects costs to rise on the back of higher staff pensions offset
in-line first-quarter results and lifted revenue guidance.
In response, Cazenove reiterated its 'in-line' advice and said the raised guidance
was already factored in and the cost pressure and pension deficit suggests there is scope for
some short-term share price weakness.
ITV was another weak performer, down 2-1/2 to 101-3/4, as profit-takers moved in
following good gains in the last two days amid continuing uncertainty over the possible
departure of the broadcaster's CEO, Charles Allen.
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And in pharmas, Shire was off 8-1/2 at 846-1/2 on reports of a court ruling in the US
that found the UK drug firm and Sanofi-Aventis had infringed upon two Amgen
patents for its anaemia treatment, Epogen.
On the second line, Spirent was in demand again, up another 2-1/4 pence to 37-1/4
in heavy volume as vague bid talk continued to do the rounds.
Mitchells & Butlers was also lifted, up 19-1/2 at 544, by speculative interest,
with talk of an approach from Enterprise Inns providing a boost.
Elsewhere, satellite communications provider Inmarsat added 17-1/2 pence to 332
after posting better than expected first half results which prompted Lehman Brothers
to reiterate its 'overweight' recommendation and 390 pence price target.
Inmarsat saw its underlying EBITDA in the six months to June 30 rise 3.6 pct to
171.4 mln usd, with adjusted sales up 2.2 pct at 245.9 mln usd.
The company said the core business is performing well and meeting expectations for the
year.
Elsewhere, broker comment supported Colt Telecom shares, up 7-3/4 pence at 122
after being upgraded to 'neutral' from 'underperform' on valuation grounds by Credit Suisse,
albeit with a reduced target of 120 pence, down from 134.
And a trio of upgrades after yesterday's results helped lift GKN shares 2-1/2
pence to 279-3/4, with Deutsche Bank, Citigroup, and UBS all raising ratings for the
autoparts group.
And still in broker comment, Jardine Lloyd Thompson added 26 at 985-1/2 as Goldman
Sachs lifted its price target to 370p from 352.8, albeit with a 'sell' rating.
On the downside, Millennium & Copthorne Hotels lost 1-3/4 at 414-1/2 as investors
opted to take profits following the release of in line first-half results.
And Trinity Mirror fell 10 at 458-1/2 after UBS cut is price target on the
media group to 455 pence from 484 as it argued its newspaper assets may be overvalued by the
market.
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Frankfurt market
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Shares closed higher after weaker than expected US jobs data sparked hopes that the Fed
will pause in raising interest rates next week, sending US stock futures higher,
with Allianz gaining sharply on a lifted full-year outlook, dealers said.
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At closing, the DAX 30 index was 83.00 points or 1.47 pct higher at 5,723.03,
having moved between 5,654.32 and 5,741.80 and having jumped from a level of 5,683.18 as the
US jobs data came out.
Today's high marked the DAX's highest level since early June this year.
The MDAX was at 7,981.68, up 96.92 points or 1.23 pct, while the TecDAX was
at 644.21, up 7.57 points or 1.19 pct.
The DAX futures contract was 5.733,00, up 31.50 points, while bund futures were at
116.94, up 0.64.
The euro last traded at 1.2888 usd, against 1.2795 in London morning trade.
Allianz led large-caps higher, up 4.53 or 3.67 pct at 127.93, as the market
cheered its raised full-year guidance and better-than-expected second quarter earnings.
Meanwhile, the fastest decliner was tyre and auto parts manufacturer Continental,
which slipped 0.74 eur or 0.94 pct to 78.19, extending yesterday's losses on its second
quarter results.
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Paris market
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Share prices ended higher as stocks bounced back from yesterday's falls in bargain-hunting
and as EDF surged on news it is likely to be granted its first tariff increase since
2003, dealers said.
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The CAC-40 index closed up 1.15 pct at 5,040.95
The euro was trading at 1.2792 usd compared with 1.2781 usd late yesterday.
EDF closed up 5.96 pct at 44.24 eur as the market welcomed news the French
government could authorise a 1.7 pct increase in electricity prices from Aug 15, and
following a 20.5 pct rise in first-half sales to 30.36 bln eur, as surging international
sales compensated for modest growth in France.
Analysts had expected group sales to grow between 17-20.7 pct to 29.617-30.416 bln eur.
Axa ended 3.43 pct higher at 28.05 eur, erasing yesterday's losses when it was hit
along with other financials by decisions by both the UK and ECB to raise interest rates.
BNP Paribas finished 3.03 pct stronger at 80.00, Credit Agricole rose 2.20
pct at 32.00 and Societe Generale rose 1.85 pct to 121.10.
EADS ended up 1.82 pct at 23.45 eur. Vinci fell 0.38 pct to 79.60, despite
unveiling a broadly welcomed 16.4 pct rise in first-half sales.
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Shares ended higher in Amsterdam, led up by financials and a higher Wall Street, while
Philips provided the story of the day after the sale of its chips operations to a
private equity consortium, dealers said.
The AEX closed 5.15 points or 1.14 pct higher to 455.80 after trading in a range
of 452.00-457.62.
Government bonds traded flat to higher while the euro stood at 1.2884 usd versus 1.2789
usd late yesterday.
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Forex Sterling Exchange Rates
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Day's Spread |
Market Rate
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| USA 1.8853 |
1.9130 |
1.9084 |
1.9087 |
| Canada 2.1189 |
2.1584 |
2.1508 |
2.1516 |
| Denmark 10.9912 |
11.0599 |
11.0483 |
11.0503 |
| Norway 11.5904 |
11.7419 |
11.6775 |
11.6895 |
| Sweden 13.5744 |
13.6677 |
13.6280 |
13.6469 |
| Japan 216.93 |
218.57 |
218.06 |
218.16 |
| Switzerland 2.3215 |
2.3362 |
2.3313 |
2.3323 |
| Euro 1.4636 |
1.4823 |
1.4809 |
1.4811 |
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