Daily news of the markets
London shares struggle to close in positive territory as Wall St slips
Leading shares struggled to close in positive territory today, pulled back from lunchtime highs by profit taking on Wall Street and a weak mining sector, dealers said|
The FTSE 100 index closed 3.0 points higher at 5,903.4, while the broader indices also ended firmer. Volume was better than of late, with 2.4 bln shares changing hands in 308,418 deals.
US stocks were lower on Wall Street, with last night's disappointing numbers from Dell and a surprisingly weak University of Michigan consumer confidence reading weighing on sentiment, traders noted.
By London's close, the DJIA was down 5.1 points at 11,329.9, while the Nasdaq was 10.20 points lower at 2,147.41.
On the economic front, August consumer confidence fell more than expected to its lowest level since October with a reading of 78.7 coming in well below July's figure of 84.7.
In London today, shares in BAE Systems enjoyed a positive day after the UK government confirmed reports that it has signed a 10 bln stg deal to sell Eurofighter Typhoon aircraft to Saudi Arabia.
BAE added 9-1/2 pence to 369-1/2, while Rolls-Royce, which is also part of the Eurofighter consortium, gained 3-1/4 pence to 428.
Earlier this morning, the Ministry of Defence said in a statement that it had signed an "understanding document" with the Saudi government "intended to establish a greater partnership in modernising the Saudi Arabian armed forces."
Responding to the news, JP Morgan reiterated its 'overweight' stance on BAE and said it feels the deal is a small positive.
Upbeat comment from Merrill Lynch also supported Rolls-Royce, with the US broker repeating its 'buy' recommendation and 530 pence target after a meeting with management.
Still on the upside, buyers came for Intercontinental Hotels and British Airways after recent weakness on the back of the UK terror alert last week.
BA was 4-1/4 pence firmer at 397-1/4, while Intercontinental climbed up 24-1/2 pence at 905, also lifted by an Exane-BNP initiation as 'buy' with a 1,235 pence target.
The French owned broker told clients that three years of intense restructuring have transformed the business, creating a focused, high growth, cash-generative defensive business with all the ingredients to 'create a surprise'.
And tobacco issues also lit up following strong gains by their US peers yesterday after a US federal judge ruled that although the nation's top cigarette makers violated racketeering laws, she could not order the companies to pay the billions of dollars the US government had sought.
In reaction, BAT shares gained 5 pence to 1,451, while Imperial Tobacco added 40 pence to 1,818, and Gallaher firmed 2-1/2 pence to 903-1/2.
On the earnings front, WPP Group added 13-1/2 pence at 652 after first-half results from the world's second-biggest advertising agency came in marginally ahead of expectations, but accompanied by a slightly cautious outlook statement.
PP said headline pretax profit before interest and tax for the six months to June 30 rose to 361 mln stg from 299.6 mln a year earlier on revenue up 16 pct to 2.86 bln stg.
Lonmin jumped of 41 pence to 2,808 as takeover talk returned to the stock.
BHP Billiton and Rio Tinto, both seen as potential suitors, however, ran back 7 pence to 1,032 and 60 pence to 2,732 respectively after shutting their Escondida copper mine in Chile and ending negotiations with its striking workers after talks failed once again. BHP owns a 57.5 pct stake in the mine, while Rio Tinto owns 30 pct
Xstrata meanwhile, lost 36 pence to 2,230, amid concerns over its expected Q4 rights issue, needed to part fund its soon to be completed acquisition of Canadian nickel miner Falconbridge.
Elsewhere, Vedanta eased 14 pence to 1,369, Kazakhmys fell 29 pence to 1,209 and Anglo American lost 51 pence to 2,369.
British Energy shares were the biggest loser however, down 31-1/2 pence to 685-1/2 as brokers continued to caution clients over the nuclear power firm's recent disappointing first-quarter results.
SG Securities reiterated its 'sell' recommendation and 410 pence fair value on the stock in a note published today and highlighted concerns over the group's output targets.
PartyGaming was also among the main casualties, losing 2-1/2 pence at 111 after a recent good run as ABN Amro downgraded its stance to 'hold' from 'buy' and slashed its price target to 100 pence from 130.
The Dutch-owned broker argued that although it has raised its estimates for PartyGaming to reflect the group's recent acquisition of Gamebookers, it has cut its target due to regulatory risk and dollar weakness and thus reduced its rating.
Among the midcaps, Provident Financial gained over 6 pct or 40 pence at 631, followed closely by peer Cattles, 4-3/4 pence stronger at 340-1/2, after the Competition Commission outlined its proposed remedies to raise competition in the UK home credit market. Proposals which Bridgewell Securities this morning described as "fairly benign, focusing on the provision of better information".
Upbeat broker comment also fuelled shares in Amlin, up 9-1/2 pence at 263-1/2 after being upgraded to 'outperform' from 'neutral' by Credit Suisse in a sector review and ahead of the group's interims in early September.
And Tomkins was boosted 10-3/4 pence higher at 291-1/4, thanks to a Morgan Stanley upgrade to 'overweight' from 'equal-weight' with an improved price target of 320 pence from 300 on the back of the engineer's attractive risk/reward balance.
Finally, on the downside, CSR lost 37 pence to 1105 amid concerns over competition from US chip designer peer Marvell, which yesterday announced the launch of a single-chip WiFi/Bluetooth product for the portable device market.
German shares close lower, tracking Wall Street
At the close, the DAX 30 index was 16.49 points or 0.28 pct lower at 5,817.02, having drifted between a high of 5,849.37 and a low of 5,804.24.|
The MDAX was at 8,130.86, down 2.60 points or 0.03 pct, while the TecDAX was at 660.53, up 2.29 points or 0.35 pct. The DAX futures contract was at 5,830.00, down 10.00 points, while bund futures were at 117.00, up 0.17 points.
Producer prices in Germany rose 0.5 pct in July from June and were up 6.0 pct from July last year, driven mainly by higher energy and raw metals prices, the Federal Statistics Office said.
The month-on-month increase exceeded forecasts of 0.4 pct from economists polled by AFX News and will keep the pressure on the European Central Bank to maintain its policy of raising rates while inflationary signals persist.
Commerzbank led large-caps lower, down 0.51 eur or 1.94 pct at 25.75, while Deutsche Boerse lost 1.91 eur to 116.00.
Deutsche Telekom was also down amid a report in Handelsblatt newspaper this morning that the telecoms giant lost out on purchasing the French operations of Time Warner's AOL internet unit, closing 0.03 eur lower at 11.30.
Bucking the trend, Fresenius Medical Care grew 1.72 eur or 1.71 pct to 102.14 after parent Fresenius AG jumped on the midcap MDAX index on the back of yesterday's wage increase won by striking doctors in university hospitals.
Fresenius was up 5.35 eur or 3.98 pct at 139.85 while Rhoen-Klinikum - which is also listed on the MDAX -- added 1.51 eur or 5.12 pct to 31.00.
Carmakers were a bright spot, with Volkswagen up 0.33 eur at 63.83. Peers BMW and DaimlerChrysler added 0.18 to 40.15 and 0.08 to 41.41 respectively.
On the MDAX, AWD Holdings slipped 0.84 eur or 3.15 pct to 25.83.
Beiersdorf was up 0.05 eur at 41.79. The stock was in focus amid news that CFO Rolf-Dieter Schwalb resigned to join Dutch firm Royal DSM NV, which HVB said should not adversely affect the performance of the financial department and reaffirmed its 'overweight' stance.
Paris shares close lower as profit-taking breaks 5-day run of gains
The CAC-40 index finished down 9.15 points at 5,135.69. On the week, the benchmark gained 150.17 points or 3.0 pct from last Friday's close.|
Volume for the day reached 4.0 bln euro. Among CAC-40 stocks, 18 closed higher, 20 closed lower and Renault ended unchanged, at 90.75 eur. The index currently has only 39 stocks, since Arcelor has not yet been replaced following its takeover by Mittal Steel.
On the Matif, September CAC-40 futures were trading off 11 points at 5,146.
Trading on the French market had been choppy throughout most of the session, partly due to last-minute adjustments ahead of the expiration of August CAC-40 futures, but also reflecting a cautious tone among investors ahead of the release of US consumer confidence data for August.
Among blue chips, Sanofi-Aventis slid 0.30 eur or 0.4 pct to 70.70 ahead of today's US court hearing in New York, aimed at keeping Canada's Apotex from selling generic versions of its Plavix blockbuster drug ahead of the full trial on the validity of Sanofi's Plavix patent, set for early next year.
EADS fell 0.19 or 0.8 pct to 23.20, handing back early gains seen after the Saudi Arabian government confirmed its order for 72 Typhoon jets from the Eurofighter consortium, reportedly worth 10 bln stg. Dealers said the stock was hit by profit taking after sharp gains seen early in the week.
Air France-KLM rose 0.05 to 20.11; French tabloid Le Parisien cited unnamed sources as saying the carrier could bail out struggling Italian airline Alitalia in return for a pledge that Enel will drop its ambitions concerning Suez. Air France-KLM, which already owns a 2 pct stake in Alitalia, declined to comment on the report.
Suez rose 0.19 to 32.95 while Gaz de France ended 0.11 lower at 28.81. The EU Commission is expected to notify the companies soon of its initial findings on potential competition concerns of the planned merger, and could require business divestment or other measures. A final EU ruling on the merger is scheduled for Oct 25.
Index heavyweight Total fell for the third straight day, closing 0.25 lower at 52.95 in the wake of sharp crude price declines this week.
Amsterdam shares close slightly up on oils, tempered by mixed Wall Street
The AEX closed up 0.15 point or 0.68 pct at 463.92, after opening at 463.03 and trading in the range of 462.76-465.52. Government bonds were mixed, while the euro stood at 1.2805 usd, slightly down from 1.2868 usd late yesterday.|
DSM led blue chip gainers, rising 1.46 pct at 29.86 on news it has ended its eight-month long search for a new CFO, with analysts welcoming the intended appointment of Beiersdorf's Schwalb.
Oil sector issues supported the index amid rising crude prices, with Royal Dutch Shell gaining 1.32 pct at 27.66 and SBM Offshore firming 0.48 pct at 21.08, also benefiting from a report it is frontrunner for two mid-size FPSO orders for ExxonMobil's Bosi field off Nigeria.
Fugro went 1.10 pct higher at 33.93 after announcing it is in talks to buy Rovtech, a Scottish provider of ROV (Remotely Operated Vehicle) services to the oil and gas industry.
TomTom was another notable AEX gainer, up 1.35 pct to 32.24, as was Heineken, rising 0.61 pct to 36.58. Fellow food and drink related issue Ahold closed 0.96 pct lower to 7.21.
Philips was the only tech gainer, lifting 0.49 pct to 26.44. Getronics fell 2.53 pct to 5.39, ASML gave up 1.20 pct at 16.48 as Delta Lloyd Securities downgraded the chip equipment maker to 'hold' from 'accumulate' as the stock nears the broker's 17 eur price target and ASMI weakened 1.52 pct to 13.58.
Ordina was down 1.52 pct to 17.48 ahead of results expected next week.
Among financials, ABN Amro added 0.28 pct at 21.55 and Fortis put on 0.07 pct at 30.14, while Aegon slid 0.79 pct to 13.88 and ING shed 0.48 pct to 33.08.
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