UK/Euro Financial Market Daily Morning Briefing – UK/Euro Financial Market Daily Morning Briefing
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A daily snapshot of the UK, French, German and Dutch markets just after the market open. Including a diary of key financial events across the UK and a summary of U.S after market close. Click here to receive or daily bulletins. News provided by AFX/Associated Press.
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UK/Euro Financial Market Daily Morning Briefing 06-09-2006
09/06/2006
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ADVFN III |
Morning Euro Markets Bulletin |
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Daily world financial news from AFX/Associated Press |
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London |
London shares lower; DSG hit by profit-taking after in-line statement
Leading shares were slightly lower in early deals as negative trade in Asia this morning dampened slight gains in New York overnight, with DSG International hit by profit taking after an in-line trading statement, dealers said. At 9.05 am, the FTSE 100 index was down 8.6 points at 5,973.1, with 2.1 points of this decline attributable to several stocks trading ex dividend, while the broader indices were also in negative terrain in early deals. Volume was light again, with 176.3 mln shares changing hands in 24,781 deals. Last night, US indices closed marginally firmer following Monday's Labor Day holiday, with the DJIA ending the session 5.20 points firmer at 11,469.30, the Nasdaq Composite index closing the day 12.54 points higher at 2,205.70 and the S&P 500 index ending up 2.25 points at 1,313.25. US sentiment was buoyed by oil prices trading at their lowest levels for over two months on Nymex following Chevron's announcement that it had successfully tested an oil well in the Gulf that could make it the largest domestic source of black gold. Oil prices continued to slide in Asian trade this morning. Commodity stocks were also in fine fettle overnight, however, US gains were capped by profit-taking after the Dow's strong gains last week. This morning, Asian trade also saw strong gains from commodity plays in line with the rising metals prices, but these were offset by profit taking as the earnings season winds down. Japan's Nikkei Index ended the morning down 22.10 points at 16,363.86 while in Hong Kong the Hang Seng finished the early session 145.05 points lower at 17,293.75. In London today, DSG International was among the main fallers in early deals, 6 pence lower at 203-3/4 as investors took the opportunity to take profits after Europe's largest electricals retailer reported an expected strong start to its financial year. For the 16 weeks to Aug 19, the group, formerly known as Dixons, saw total sales increase 14 pct, while like-for-like sales, which strip out the impact of new and closed space, were up 5 pct -- bang in line with analysts' consensus forecast.
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However, Drax Group was the main casualty of profit taking, sliding 36 pence at 902 as investors reaped the benefits of the stock's recent gains, hit further by Merrill Lynch downgrading the stock to 'neutral' from 'buy'. Also on the downside were several ex-dividend stocks, namely BHP Billiton, Legal & General, Slough Estates, Alliance & Leicester, Corus Group and Amvescap. Meanwhile, on the upside, Man Group enjoyed pole position, 12-1/2 pence firmer at 456-3/4 after its key hedge fund AHL last night announced its net asset value isup 1.45 pct on the week. And on the M&A front, Centrica continued to ride on the back of bid speculation, adding a further 4-3/4 pence to yesterday's 5-3/4 pence rise to currently trade at 313. Reed Elsevier was also among the top gainers, 5-1/2 pence to the good at 570, thanks to an upbeat research note from UBS in which the broker hiked up its price target to 675 pence from 645 and reiterated its 'buy' advice on the publisher. Broker comment also boosted Enterprise Inns, up 4-1/2 pence at 1,027, as JP Morgan initiated coverage of the leisure group with an 'overweight' rating in a pubs and restaurants sector note. The broker said the mature drinks-led sector provides a stable backdrop for the operators to grow their food businesses, and added that it expects to see a continuation of the strong real market growth of 4.3 pct each year. Elsewhere, the strong commodity prices fuelled fresh gains in several mining issues, with Kazakhmys up 11 pence at 1,342 and Lonmin 10 pence better at 2,830. On the second line, Woolworths enjoyed a strong start to trade, taking on 1-1/4 pence at 35-1/2, following a press report that the high street retailer could be broken up under a takeover plan devised by one of its biggest shareholders, Baugur. The Financial Times reported today that the acquisitive Icelandic group plans to dramatically cut the size of the 96-year-old chain, which has 800 stores in most cities and towns, and also wants to pass on a large number of the stores to a leading supermarket chain such as Asda. Baugur is understood to have calculated that most of the finance needed for a takeover of the 500 mln stg company could be raised by separating out Woolworth's two entertainment businesses, which it values at more than 350 mln stg, the FT added.
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Elsewhere, construction group Carillion was 10 pence higher at 335 after saying it expects full-year profits to exceed its expectations slightly, as it reported a 23 pct rise in interim pretax profit before exceptional items to 24.7 mln stg. The group said it expects to make further progress in the second half on the back of positive trading and an order book that has more than doubled to 14.5 bln stg during the first half against the end of last year. Among the midcap fallers, Wilson Bowden was down in the dumps, 35 pence lower at 1,715, amid profit-taking following yesterday's M&A-related share price climb and after it today reported interim pretax profits below analyst forecasts. Pretax profits for the six months to June fell to 82.2 mln stg from 98.5 mln stg in the previous year on revenues which slipped to 525.2 mln stg from 554.9 mln stg, with the company blaming a sluggish housing market at the start of the year. However, it also said it is in a stronger position for the second half than this time last year. Among broker changes, downbeat comment weighed on Meggitt, down 9-3/4 pence at 308 following a UBS downgrade to 'neutral' from 'buy' on valuation grounds following the firm's solid first-half results released yesterday. In a note to clients, UBS said that despite the good numbers it thought there was little additional positive catalysts to justify a more aggressive stance on the shares. Finally, on the economic front, the UK's industrial output index is due out this morning, with the market forecasting a slight rise month-on-month to +0.1 in July versus -0.1 in the previous month, while July manufacturing output is expected to land at +0.2, up from +0.1 in June. Later today, US investors will be keeping a close eye on ISM non-manufacturing figures for August, with the market looking for slight growth to bring the figure to 55.0 pct from 54.8 pct in the month. Also on the data agenda are revisions of the second-quarter readings of unit labour costs and productivity. Productivity for the region is expected to be raised to 1.6 pct from the initial reading of 1.1 pct, while unit labour costs are seen being revised downwards to 3.8 pct from 4.2 pct.
UK Diary of Events
For a calendar 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
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Frankfurt |
FRANKFURT - Market data at 9.52 am
Major indices: DAX 30 - 5,866.75, down 17.32 points or 0.29 pct MDAX - 8,227.97, down 0.83 point or 0.01 pct TecDAX - 650.55, up 1.68 points or 0.26 pct DAX future - 5,870.50, down 31.00 points or 0.53 pct
Major gainers: MAN, up 0.66 eur or 1.09 pct at 61.45, as UBS lifted its price target on the stock to 63 eur from 57 after increasing its 2008 EBIT forecast by 20 pct Deutsche Post, up 0.16 eur or 0.80 pct at 20.21, as Landesbank Rheinland-Pfalz upgraded its stance on the stock to 'outperformer' from 'marketperformer' with a 24 eur price target. Adidas, up 0.13 eur or 0.35 pct at 36.76, recovering from recent losses Infineon, up 0.03 eur or 0.33 pct at 9.14 Linde, up 0.19 eur or 0.27 pct at 70.29, as it said it plans to sell the equipment businesses of its newly acquired BOC Edwards unit, and that it has grouped its three Material Handling brands Linde, STILL and OM in a new, independent holding company called "KION Group", which it plans to spin off Major losers: ThyssenKrupp, down 0.31 eur or 1.14 pct at 26.94, as HSBC downgraded its stance on the stock to 'underweight' from 'overweight' and slashed its price target to 22.50 eur from 31.00 Fresenius Medical Care, down 0.67 eur or 0.65 pct at 101.75 Munich Re, down 0.73 eur or 0.62 pct at 116.40 Altana, down 0.28 eur or 0.60 pct at 46.24 BMW, down 0.24 eur or 0.59 pct at 40.18
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Paris |
PARIS - Market data at 9.33 am:
Major indices: CAC-40 down 3.06 points at 5,169.79 SBF-80 up 8.19 at 5,814.69 SBF-120 down 0.76 at 3,738.70
Volume: 359 mln eur 19 CAC-40 stocks up 19 CAC-40 stocks down 1 unchanged Arcelor-Mittal will enter the index from Sept 18
Major gainers: Credit Agricole, up 0.38 eur or 1.2 pct at 32.32 after posting better than expected first half earnings, thanks largely to strong profits for its corporate and investment banking division. Accor, up 0.34 or 0.7 pct at 49.77 as it confirmed investor hopes of further restructuring moves, including the study of a sale of its Red Roof Inn chain in the US, while reporting better than expected first half profits. Bouygues, up 0.23 at 41.76; the group raised its 2006 sales guidance for the second time this year, to 26 bln eur from 25.8 bln, while posting first half earnings ahead of forecasts.
Major losers: Dexia, down 0.27 at 19.62 after launching a 1 bln eur capital increase to fund its 2.44 bln eur buy of Turkey's DenizBank SA. Vivendi, down 0.13 at 27.03 after confirming buy of BMG from Bertelsmann for 1.63 bln eur, seen as a smart strategy move but at a high price, dealers said. Alstom, down 0.65 at 75.25 as JP Morgan cut the stock to "underweight" from "neutral" on valuation grounds. Vinci, down 0.30 at 84.90 as profit-taking followed its release of strong first half earnings and a three-year plan to triple EBITDA - the stock closed at an all-time high on Monday.
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Forex |
London 0820 GMT |
Sydney 0515 GMT |
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US dollar |
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yen 116.32 |
down from |
116.42 |
sfr 1.2329 |
down from |
1.2340 |
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Euro |
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usd 1.2828 |
up from |
1.2815 |
stg 0.6776 |
up from |
0.6765 |
yen 149.23 |
up from |
149.18 |
sfr 1.5815 |
up from |
1.5810 |
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Sterling |
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usd 1.8932 |
down from |
1.8948 |
yen 220.25 |
down from |
220.47 |
sfr 2.3342 |
down from |
2.3373 |
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Australian dollar |
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usd 0.7686 |
up from |
0.7682 |
stg 0.4060 |
up from |
0.4054 |
yen 89.40 |
down from |
89.445 |
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