UK/Euro Financial Market Daily Morning Briefing 01-05-2007

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London shares open weaker after Wall Street, Tokyo falls; Europe closed

UK blue chips fell back in early deals this morning reflecting falls overnight on Wall Street and in Tokyo and with most European bourses closed for May Day celebrations, and with Punch Taverns a big faller on post-results profit-taking, dealers said.
   
At 9.12 am, the FTSE 100 index was 34.4 points lower at 6,414.8, with all the broader FTSE indices also lower.
   
Early volume was solid, with 235 mln shares changing hands in 43,190 deals.
   
Overnight on Wall Street, the DJIA ended 58 points lower at 13,062.90 after a volatile session that saw the US blue chip index hit a new trading high during the session of 13,162.06.
   
Meanwhile, the Standard & Poor's 500 index shed 11.70 points to end at 1,482.37, while the Nasdaq composite index dropped 32.12 points to close at 2,525.09.
   
US stocks retreated as investors cashed in some profits on the last trading day of April, which saw the DJIA record its best month in more than three years, after some mixed US data and amid nervousness ahead of this Friday's key US April jobs report.
   
Today in Asia, the Nikkei 225 index ended 125.43 points lower at 17,274.98 in line with the retreat on Wall Street, with some players turning wary over a possible build-up in selling pressure amid talk of tighter regulations on hedge funds as well as signs of a deterioration in supply-demand conditions after the Golden Week break.
   
Hong Kong was closed for a public holiday today.
   
In London, Punch Taverns was a big casualty early on, losing 28 pence to 1,278 on profit-taking following in-line interim results from the pubs operator.

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Punch saw its profit before tax and asset sales increase 12 pct to 130 mln stg in the first half, after what the group called "an extremely active" period. The group said the conversion of the smaller Spirit Group pubs to lease is on track, with second half trading in line with expectations.

Schroders was also a blue chip faller, down 14 pence at 1,281 following an uneventful trading statement.
   
The UK investment manager said its pretax profit for the three months to end-March 2007 rose 30 pct to 93.2 mln stg, up from 71.4 mln for the same period last year.
   
Funds under management at end-March 2007 were up less strongly to 132.3 bln stg from 128.5 bln stg at Dec 31, 2006.
   
Capita was also lower, down 4-1/2 pence at 703-1/2 after its AGM update failed to inspire in a dull market. Capita said current trading is very encouraging with excellent growth prospects for the future, on the back of a strong performance in 2006.
   
On the broker front, Northern Rock shares lost 18 pence at 1,059 as Citigroup reiterated its 'sell' stance and cut its price target to 1,000 pence from 1,100 pence following a recent trading update from the mortgage bank.
   
Among the handful of FTSE 100 gainers early on property group Liberty International stood out, up 22 pence to 1,231 following Q1 results that prompted KBC Peel Hunt to raise its stance to 'add' from 'hold'.
   
Other real estate blue chips moved higher in sympathy, with Slough Estates taking on 10 pence at 783 -- aided also by a return of bid speculation -- while Land Securities added 9 pence at 1,971, and Hammerson gained 5 pence at 1,530.
  
Elsewhere among the blue chip risers, copper mining firm Antofagasta extended yesterday's gains, adding 2-1/2 pence at 540 amid vague takeover speculation.
   
On the second line, Autonomy was a good gainer, up 16 pence at 771-1/2 on news that the data search company has signed a multi-million dollar contact to supply data to the UK Ministry of Defence.
   
In reaction, Seymour Pierce reiterated its 'buy' stance on Autonomy.

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Workspace was also in demand, up 6-1/4 pence to 461-3/4 after news of the appointment of Angus Boag as its development director.
   
On the downside with mid caps, Aberdeen Asset Management shares shed 8-1/4 pence to 211-3/4 after slightly disappointing interim results.
   
The UK investment manager saw its pretax profit before one-off items for the six months to March 31, 2007 come in at 43.6 mln stg, up from 36.8 mln stg in the same period a year earlier.
   
In reaction, Bridgewell said investors that have come to expect continuous earnings upgrades from Aberdeen may be disappointed this morning.
   
However, Bridgewell noted that Aberdeen's interim results were in line with expectations and added that the results suggest Aberdeen will continue to outperform its peers.

UK Diary of Events

For a diary of key financial and corporate events in the UK this week, click here

US Summary

For a summary of US stocks at yesterday's close of trade, click here

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Gold lower in quiet trade as dollar steadies, oil declines

LONDON  - Gold was lower in light trade as the dollar held steady against major currencies while oil prices eased a touch.
   
At 9.28 am, spot gold was quoted at 677.55 usd per ounce, down from 680.10 usd seen in late New York trade yesterday.
   
Quiet trading is expected today, with markets closed in Europe and Asia for the May Day and Golden Week holidays. Currency movements are seen as the main drivers of gold.
   
"The dollar is likely to be the key driver for gold in the coming sessions with a break through 1.37 against the euro potentially propelling gold back towards the 694 usd resistance line," said analyst James Moore of TheBullionDesk.com. "However there is the risk that further failed rallies will trigger another correction, potentially leading to a test of chart support located around 664/69 usd," he added.

Oil hovers around 68 usd as Saudi supply security fears ease

LONDON - Oil hovered around 68 usd as fears about security of supply from Saudi eased somewhat, and US inventories looked healthy.
   
At 9.29 am, London Brent crude for June delivery was down 9 cents at 67.57 usd. Meanwhile, New York crude for June delivery was down 21 cents at 65.50 usd a barrel.
   
Prices have been softer this week having spiked Friday after Saudi Arabia said it had arrested 172 militants it said were plotting attacks on oil installations. Brent prices are trading 1 pct lower than last week.
   
Commenting on news from Saudi, Sucden analyst, Michael Davies said: "Usually the news of something being foiled would put pressure on prices," adding the
main focus is likely to switch today to a weekly US stocks report due tomorrow.
   
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COPENHAGEN - Market data at 9.25 am

Major indices
   
OMXC20 down 0.79 point at 484.67
OMXCB down 0.94 point at 466.36
OMXC down 1.03 points at 463.56
   
Turnover - 673 mln dkr

Major gainers
   
DSV up 6.00 dkr at 1,138.00, trading ex dividend of 2.50 dkr per share
   
Novo Nordisk up 1.00 dkr at 538.00
   
ALK Abello up 3.00 dkr at 1,077.00

Major losers
   
AP Moller Maersk down 400 dkr at 60,800, trading ex dividend of 55 dkr per share
   
GN Store Nord down 0.50 dkr at 62.50
   
Vestas Wind Systems down 2.00 dkr at 357.00

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