UK/Euro Financial Market Daily Morning Briefing 03-05-2007

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London shares higher, Q1 data boosts sentiment, Pru up on break up talk

Leading shares continued yesterday's rally in early deals amid a raft of solid results from several FTSE 100 heavyweights, with Prudential higher on break up talk, dealers said.
   
At 9.00 am, the FTSE 100 was up 39.6 points at 6,524.1, after closing up 64.9 points yesterday. The broader indices were also higher. Early volume was moderate with 256 mln shares changing hands in 60,034 deals.
   
Last night on Wall Street, the DJIA was up 75.74, or 0.58 pct, to 13,211.88. The blue-chip index hit a fresh trading high of 13,256.33 after reaching 13,184.14 on Tuesday. The Dow has set 16 record closes this year and 39 since the beginning of October; the latest closing high came on Tuesday.
   
Broader stock indicators also rose on Wednesday. The Standard & Poor's 500 index advanced 9.62 to 1,495.92, while the Nasdaq composite index rose 26.31 to 2,557.84.
   
In Asia, Hong Kong's Hang Seng ended the morning session up 228.03 points at 20,616.52, with Japanese markets again closed today for a public holiday.
   
Among early risers, companies reporting Q1 earnings rose to the top of the leader board.
   
Anglo Dutch food and home product producer Unilever rose 57 pence to 1,613 after its Q1 results beat expectations as it benefited from an improvement in its operating margin.
   
UBS reiterated its 'buy' recommendation on the stock, saying both margins and organic sales were better than expected.
   
The broker noted that management had reiterated its 3-5 pct sales growth target for the full-year, which it regards as "understandable caution so early in the year".
   
Elsewhere, oil giant Royal Dutch Shell took on 39 to 1,846 after Q1 earnings beat analysts' expectations, as strong downstream oil products, refinery margins and liquefied natural gas sales volumes offset the impact of weak oil and gas prices and production and higher costs.

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Also higher, ICI gained 7-3/4 to 533 after unveiling stronger than expected Q1 adjusted pretax profit.
   
Citigroup said it believes that ICI's full valuation relative to its cash flow generation make a takeover only a limited possibility.
   
In other news, Prudential rose 20 to 770 after the Daily Telegraph said one of the company's major shareholders wrote a letter to the company suggesting a break-up of the 18 bln stg insurer could be advantageous.
   
The newspaper said a letter was sent to Prudential chairman Sir David Clementi on March 29 by a fund manager with a substantial shareholding explaining there may be advantages in splitting up the business. The letter also called for the company's board not to dismiss the proposal as short-termist and address the issue.
   
Back among earnings driven gains, British American Tobacco jumped more than 2 pct to record highs in early trade after first-quarter results from the world's second-biggest cigarette maker beat City forecasts.
   
UBS said despite Q1 EPS beating consensus by about 8 pct, full-year forecasts are unlikely to rise significantly because of the one-off factors. The broker said it remains positive on the stock, with a 'buy' rating.
   
Bucking the positive early trend, mining issues slipped after base and precious metal prices eased amid concerns Indian demand may wane.
   
Xstrata eased 23 to 2637, and ahead of a production update at 10.00 am Antofagasta fell 4 to 545.
   
On the second line, Berkeley Group took on 113 to 1833 after UBS upped its stance on the property company to 'buy' from 'neutral' and lifted its target to 2082p from 1800.
   
Investec climbed 37 to 770 after saying FY EPS was likely to be 24-29 pct higher than in 2006.
  
Elsewhere, music retailer HMV rose 1.75 to 117.88 after FY results came in as expected with Evolution upping its stance to 'add' from 'reduce'.
   
Finally, Tomkins dipped 5-1/4 to 262 after saying it expects lower activity in its two main markets and the weaker dollar to affect its performance for the rest of the year.
   
Later, on the economic front, the purchasing managers' index on UK services sector activity is expected to be little changed in April, dipping to a still solid 57.5 from 57.6 in March.

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UK Diary of Events

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

US Summary

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

Vienna 

VIENNA - Market data at 10.07 am

Main Indices
   
ATX up 0.42 pct or 19.96 points at 4,739.93
ATX Prime up 0.37 pct or 8.90 points at 2,419.89

Main Gainers
   
Andritz up 3.59 pct at 48.43 eur
   
Verbund up 1.15 pct at 38.74 eur
   
Erste Bank up 0.85 pct at 58.32 eur
   
Oesterreichische Post up 0.84 pct at 33.46 eur
   
Raiffeisen International up 0.77 pct at 103.99 eur

Main Losers
   
BWIN down 1.43 pct art 31.10 eur
   
voestalpine down 0.69 pct at 50.14 eur
   
Flughafen Wien down 0.35 pct at 77.39 eur
   
Boehler-Uddeholm down 0.33 pct at 71.85 eur
   
Intercell down 0.33 pct at 24.00 eur

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PARIS - Market data at 9.27 am:

Major indices:
   
CAC-40 up 27.16 points or 0.45 pct at 6,017.29
SBF-80 up 12.08 points or 0.16 pct at 7,376,27
SBF-120 up 19.46 points or 0.44 pct at 4,402.86

Volume: 380 mln eur
28 CAC-40 stocks up
12 CAC-40 stocks down
   
Major gainers:
   
Lafarge, up 3.53 eur or 2.91 pct at 125.04, after first-quarter results exceeded forecasts.
   
Vinci, up 2.78 eur or 2.34 pct at 121.83. It posted strong first-quarter sales and said full-year growth targets are poised to rise.
   
Technip, up 1.08 eur or 1.96 pct at 56.10, after naming regional COO Guy Arlette as its new president of operations.

Major losers:
   
Publicis, down 0.50 eur or 1.40 pct at 35.11, after saying first-quarter organic sales growth lagged the overall reported rise.
   
Peugeot, down 0.36 eur or 0.60 pct at 59.42, after industry data showed a drop in its French car sales in April.
   
Carrefour, down 0.15 eur or 0.27 pct at 55.87. On Monday it reconfirmed guidance that full-year operating profit will grow at a slower rate than sales.

Most active stocks:
   
Total, 43 mln eur, up 0.63 eur or 1.15 pct at 55.63
   
Sanofi-Aventis, 33 mln eur, down 0.17 eur or 0.25 pct at 68.19
   
Lafarge, 30 mln eur

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Milan - TFN market data at 10.10 am:

Main indices
   
Mibtel at 33,984, down 0.16 pct
S&P/Mib at 43,782, down 0.12 pct

Main S&P/Mib losers
   
Pirelli down 1.35 at 0.886
   
Alitalia down 1.20 pct at 0.900
   
Alleanza down 1.28 pct at 10.40
   
Saipem down 1.06 pct at 23.39 after a Goldman Sachs downgrade to 'sell' from 'neutral' with a 23 eur target price. It sees the group as expensive relative to the engineering and construction sector which it has outperformed in the year-to-date.
   
UBI Banca down 0.93 pct at 22.32 

Main S&P/Mib gainers
   
Buzzi Unicem up 0.88 pct at 24.16
   
Eni up 0.48 pct at 24.89
   
Italcementi up 0.46 pct at 24.01
   
Enel up 0.37 pct at 8.38
   
Snam Rete Gas up 0.14 pct at 4.727

Other stocks in the news
   
Telecom Italia down 0.86 pct at 2.132 after Morgan Stanley downgraded the stock to 'underweight' from 'equal-weight'
   
AEM up 0.09 pct at 2.877 after reports the meeting of its main shareholder and that of ASM Brescia to give the go-ahead to the merger of the two local utilities was put back a week due to problems with the share-swap ratio. Meanwhile, Morgan Stanley kept its 'overweight' stance with 3.0 target

ASM up 0.74 pct at 4.947
   
Telecom and energy cable group Prysmian up 6.07 pct at 15.91 on its first day of trading
   
D'Amico International Shipping SA up 1.71 pct at 3.56 on its first day of trading

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COPENHAGEN - Market data at 09.35 am

Major indices
   
OMXC20 up 1.47 points at 491.44
OMXCB up 1.21 points at 471.67
OMXC up 1.07 points at 467.88
   
Turnover
   
1.645 bln dkr

Major gainers
   
Danisco up 21.50 dkr at 489.00, after confirmation of talks on sale of  Flavours division.
   
Novo Nordisk up 10.00 dkr at 585.00
   
Carlsberg up 7.00 dkr at 626.00
   
FL Smidth up 6.00 dkr at 431.50

Major losers
   
GN Store Nord down 1.25 dkr at 61.00
   
Nordea down 1.50 dkr at 92.75
   
Vestas Wind Systems down 1.00 dkr at 358.50

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