UK/Euro Financial Market Daily Morning Briefing 01-11-2006

£11,612 Spread Betting Profit banked in October already! Click here.

London shares higher in early deals; miners, Cairn Energy support
  
At 8.55 am, the FTSE 100 index was 16.6 points firmer at 6,145.8 after closing up 2.4 points at 6,129.2, while the broader indices traded mixed. Volume was average, with 213 mln shares changing hands in 23,540 deals.
   
Overnight, US stocks ended mixed, with the market uneasy after the Conference Board said its index of consumer confidence fell to 105.4 from 105.9 in September -- well below the 107.8 analysts expected -- raising concerns on Wall Street about the strength of consumer spending and the economy in the coming months.
   
The DJIA closed 5.80 points weaker at 12,080.73, while the Nasdaq Composite ended 2.94 points firmer at 2,366.71 and the S&P 500 index ended unchanged at 1,377.94.
   
Meanwhile, in Asia this morning, indices diverged as Tokyo's Nikkei 225 index closed 24.13 points lower at 16,375.26 but Hong Kong's Hang Seng ended 129.30 points higher at 18,453.65.
   
Still in Asia, oil prices were easier, with the New York Mercantile Exchange's main contract, light sweet crude for December delivery, 0.03 usd lower at 58.70 usd a barrel earlier this morning against its close of 58.73 usd in the US overnight. Brent North Sea crude for December had dropped 0.08 usd to 58.95 usd.
     
Turning to London, Cairn Energy was among the top FTSE 100 risers, up 30 pence at 1,785, after the oil and gas exploration company said current trading is in line with statements in its interim results as it confirmed plans for a flotation of its Cairn India operation on the Bombay Stock Exchange and the National Stock Exchange of India in December.
      
Elsewhere, the mining sector also provided support, fuelled by a fresh rise in commodity prices, with gold breaching the 610 usd an ounce mark this morning in Asian trade and copper and silver prices also on the up.
   
Xstrata led the miners higher, 47 pence firmer at 2,287, closely followed by Anglo American, 37 pence better at 2,401, Lonmin, up 56 pence at 2,958 and BHP Billiton, 16 pence stronger at 1,027.
   
Turning to financials, Old Mutual climbed up 1-3/4 pence at 171-1/4 after its US asset management arm announced last night that its assets under management (AUM) increased by 2.8 pct quarter-on-quarter to 237.3 bln usd in the third quarter.

Use our professional platform to trade on margin and trade tax free. Speculate on Oil, Gold, Foreign Exchange, Worldwide Indices, Equities and Options. Go long or short on all our markets. Click here.

Back to those reporting results today, Brambles Industries took on 4-3/4 pence at 498-1/4 after revealing an upbeat update this morning. The Anglo-Australian firm said its three-month sales and profits at Chep and Recall are "well ahead' of the previous year, with the former's sales up 6 pct and the latter's sales up 18 pct to September.
   
Looking ahead, Brambles added that it expects further good progress in Chep and Recall in 2007.
   
Among broker changes, AstraZeneca benefited from bullish comment from both Nomura Code Securities and Morgan Stanley, pushing the shares 37 pence higher at 3,135.
   
Nomura Code today told investors its has upgraded its stance on the pharma group to 'neutral' from 'reduce' as the broker's fears concerning the most risky of Astra's pipeline candidates have now been realised and the rating correspondingly reduced.
   
And Morgan Stanley said it has become more positive on the UK pharma group, adding that Astra is now relatively more attractive than peer GlaxoSmithKline, which this morning dipped 9 pence at 1,391.
   
Morgan Stanley reiterated its 'equal-weight' stance on Astra while lifting its price target to 3,450 pence from 3,300.
   
But on the downside, Tate & Lyle slipped 4 pence at 784 after the food ingredients group unveiled interim results that beat expectations, but also cautioned that the second half will be hit by EU sugar reform.
   
This morning, the maker of Splenda reported a 27 pct rise in interim underlying pretax profits to 173 mln stg, but said it expects profit growth in the second half to be lower than the first half due to "the intensifying impact of EU sugar reform".
   
BAE Systems was also down in the dumps, 3-1/4 pence lower at 416-1/4, on the back of a Daily Telegraph report that a multi-billion pound deal to build two new aircraft carriers for Britain's Royal Navy risks slipping further behind schedule amid continuing disagreements between the consortium building the craft and the Ministry of Defence over rising costs.
   
The aircraft consortium, which includes BAE, VT Group, Thales and MoD officials, should have submitted final price details Thursday, but missed the deadline, the paper said. Midcap VT Group slipped 6 pence at 475 on the news.
   
Also on the second line, St James's Place was among the top performers, 13-1/4 pence to the good at 397-3/4, after announcing this morning that new business was up 58 pct to 246 mln stg for the first nine months of the year to end-September, from 156 mln in the same period last year, fuelled by a leap in the company's pensions business.
   
The figure beat analysts' expectations, which were in the range of 229-238 mln stg and also prompted the company to say it now expects full-year earnings to come in at the top end of its guidance range.
   
Meanwhile, Carphone Warehouse Group was also in demand, up 9-1/2 pence at 293, thanks to a Goldman Sachs upgrade to 'buy' from 'neutral' on the back of the stock's weakness, the group's positive trading update and its recent AOL deal.

Invest in small fast-growing shares to make serious money whatever the market does. Average gains of 98% on live tips from launch on 24/04/03 to 08/09/06. Enjoy crystal-clear buy and sell notes and top results with the UK’s leading online share tipsheet. Learn more here.

Broker comment also boosted Ladbrokes, with the shares taking on 10-1/2 pence at 419 after Citigroup initiated coverage of the UK bookmaker with a 'hold' rating and 420 pence price target.
   
The broker also cut its stance on peer William Hill to 'hold' from 'buy' on valuation grounds, but said on the upside both Ladbrokes and William Hill have three strategic options for growth, supported by each company's strong cash generation. William Hill's shares fell back 7 pence at 644.
   
Still on the downside, ex-dividend plays apart, ARM Holdings slipped 1-3/4 pence lower at 116 after being downgraded to 'hold' from 'buy' by ABN Amro with a reduced target of 120 pence from 130 following yesterday's third quarter results.
   
The broker said although it believes ARM will continue to gain market share in the System-on-Chip (SoC) design market over the next few years, it is concerned about the impact of rising inventories in the electronics food chain and downward pressure on the group's royalty rate.
   
Elsewhere, on the macro-economic data front, today's monthly manufacturing survey from the Chartered Institute of Purchasing and Supply is likely to have softened in October, in line with an equivalent survey from the Confederation of British Industry.
   
Analysts expect the main purchasing managers' index to have slipped to 54.0 in October from September's 54.4. Despite the fall, the PMI continues to point to expansion in the sector as any reading above 50 denotes growth.
   
In the US this afternoon, investors await the Institute for Supply Management's index of Manufacturing Activity, seen rising to 53.1 in October from 52.9 in September. "Look for small gains in new orders, production, employment, vendor performance and inventories. Prices should fall again but not by as much as in September," said Jeoff Hall of Thomson IFR Markets.
   
And, finally, North American construction spending in September is seen unchanged after having risen 0.3 pct in August.

UK Diary of Events

For a diary of key UK financial and corporate events today, click here

US Summary

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

Rock memorabilia auction house: closes 02/11/2006 
UK property development: closes 10/11/2006 
Natural resources investment company: closes 30/11/2006 
Hospitality and sports venue in Piccadilly: closes 27/03/2007
Click here to find out more

PARIS - Market data at 9.33 am:

Major indices:
   
CAC-40 up 2.97 points at 5,351.70
SBF-80 up 8.02 at 6,268.84
SBF-120 up 3.02 at 3,889.58

Volume: 240 mln eur
24 CAC-40 stocks up
15 CAC-40 stocks down
1 unchanged

Major gainers:
   
Thomson, up 0.16 eur or 1.2 pct at 13.67 and extending yesterday's gains after China's TCL said it will launch a restructuring plan for the loss-making European operations of TCL Multimedia, the television venture in which Thomson owns a 29.3 pct stake.
   
EADS, up 0.10 at 21.35 after nominating Eurocopter CEO Fabrice Bregier as COO for Airbus, confirming recent press speculation.
   
Vivendi, up 0.13 at 29.80; its Universal Music division has cut internet downloading costs for 1,500 albums in its catalogue by 30 pct in an effort to win clients.

Major losers:
   
Sanofi-Aventis, down 0.30 at 66.30 and adding to yesterday's heavy selling, seen after disappointing third quarter sales and cautious comments on Acomplia, a drug that many investors hope will be the group's next blockbuster.
   
Atos Origin, down 0.48 or 1.1 pct at 44.12 as selling continued after yesterday's warning on full year sales and margins, with both WestLB and Citigroup analysts cutting their ratings on the group today.

Save up to 50% on Jermyn Street style shirts and accessories, from silk ties to silver cufflinks, by shirt-maker Joseph Turner.
Click Here

AMSTERDAM - Market data at 10.24 am
   
Major indices
   
AEX                 485.92, down 0.65 points
AMX Midcap          626.53, down 0.76 points 
Government bonds    Flat to lower

Major gainers
   
TomTom led gainers, adding 1.69 pct to 33.6 eur amid bargain-hunting after sharp losses yesterday following a share sale by members of the executive board, and an upgrade to 'neutral' from 'reduce' at UBS
   
DSM added 1.57 pct to 36.27 eur
   
ASML put on 1.28 pct to 18.15 eur
   
Wolters Kluwer gained 0.37 pct to 21.62 eur amid speculation that it may sell its Wolters-Noordhoff publishing company to a Dutch publisher
   
Major losers
   
Buhrmann fell 9.03 pct to 11.08 eur as underlying figures in its third quarter earnings report disappointed, dealers said
   
Hagemeyer shed 1.49 pxt to 3.96 eur in continuation of yesterday's sharp drop
   
Vedior lost 1.40 pct to 14.13 eur
   
Univar shed 1.04 pct to 38.85 eur ahead of earnings tomorrow

Nick a few quid on the FTSE 100. Up or down? You decide. Bet on the FTSE direction every 30 minutes daily. Click here.

ADVFN Services