UK/Euro Financial Market Daily Morning Briefing 08-11-2006

Financial spread trading 24 hours a day, 5 days a week. Click here for more information.

London shares weak in early deals after Democrats victory in US elections

UK blue chips beat a retreat in early deals this morning with investors spooked by the blow overnight to President Bush in the US mid-term elections after the Democrats took power in the House of Representatives for the first time since 1994.
   
At 9.03 am, the FTSE 100 index was 18.9 points weaker at 6,225.1, albeit coming off an opening low of 6,214.7. All the broader FTSE indices were lower as well.  Early volume was fair, with 237 mln shares changing hands in 33,255 deals.
   
Overnight on Wall Street, ahead of the mid-term Congressional election results, the DJIA closed 51.22 points higher at 12,156.77, while the Nasdaq composite index ended 9.93 points firmer at 2,375.88.
   
In Asia, the Nikkei 225 index closed 177.67 points lower at 16,215.74, while the Hang Seng closed down 128.07 at 18,811.24 on profit-taking after gaining for six straight trading days.
   
In London, weakness in the heavyweight mining sector was a drag on the blue chips. The sector retreated after a recent rally with commodities prices lower after the US election news raised worries about the path ahead for the world's biggest economy.
   
Among the fallers, BHP Billiton lost 20 pence at 1,040, Rio Tinto shed 44 pence at 2,871, Xstrata dropped 32 pence at 2,388, and Lonmin fell back 38 pence to 3,002.
   
Ex-dividend factors played a part as well, clipping over 8 points off the FTSE 100 index, with BP, Unilever, and ITV among those stocks losing their dividend attractions today.
   
In the news, Standard Life shares shed 6-1/4 pence at 286-3/4 at 1,487 after its nine-month sales figures came in slightly below expectations, with a weak performance overseas offsetting strong UK life and pensions sales.
   
Total worldwide insurance sales for the nine months to end-September rose 26 pct to 1.119 bln stg on an annual premium equivalent basis from 890 mln stg in the same period last year.
   
In response, Merrill Lynch reiterated its 'hold' advice on Standard Life and said the sales figures were better than its forecast, but broadly in line with consensus. Broker comment also had an impact on blue chips.
   
Tesco shed 6-1/4 pence at 396-3/4 after being downgraded to 'hold' from 'buy' by Merrill Lynch on valuation grounds ahead of Q3 results due in December. 

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

And shares in Next Group lost 20 pence at 1,865 after being cut to 'hold' from 'buy' by Citigroup.
   
The broker argued that the group's like-for-like sales upgrade prospects are limited, noting that "available cash" growth for the UK consumer is expected to slow over the next 9 months, while the positive 2-year sales and space ambitions at M&S could also temper growth.
  
But on the upside with blue chips, clothing retail peer Marks & Spencer continued to benefit from yesterday's better-than-expected interim results, adding 7 pence at 705 and shrugging aside news of a downgrade to 'hold' from 'buy' by ING made on valuation grounds.
   
Also on the high street, shares in DSG International added 6 pence at 220 after Citigroup lifted its target on the electronics retailer to 250 pence, up from 230 pence ahead of the group's interims on November 22. Citigroup also reiterated its 'buy' recommendation on DSG.
   
AB Foods rallied from the profit-taking seen yesterday after its in-line first half numbers, adding 21 pence at 865.
   
And a revival of bid speculation fuelled gains in Scottish Power, up 16-1/2 pence to 688, with Germany's RWE mentioned as a possible predator again.
   
Other utilities were also in demand helped by the sector consolidation talk and their defensive attractions - Scottish & Southern Energy gained 16 pence at 1,362, Kelda firmed 5 pence at 891-1/2, and International Power added 1-3/4 pence at 336.
   
On the second line, C&W was the top riser, advancing 7 pence to 158 after the UK telecoms group accompanied stronger-than-expected half-time results with assurances that the recovery of its domestic business is running ahead of schedule.
   
The group reported a 10 pct rise in underlying profits to 221 mln stg, much higher than the 203 mln consensus forecast, on the back of some heavy cost cutting.
   
There was also relief that the latest restructuring programme at its struggling UK business is beginning to bear fruit, with C&W raising its full-year EBITDA guidance for the unit to 145-150 mln stg.
   
Well-received results also gave a lift to FirstGroup shares, up 2 pence from 548, with the transport group performing strongly in the first half despite a 23 mln stg hike in fuel costs.
   
FirstGroup saw its adjusted pretax profit rise to 59.9 mln stg, up from 55.5 mln stg a year ago as revenues increased to 1.715 bln stg from 1.376 bln stg previously.

..at St Lucia's most successful buy to let 5 star resort development. Enjoy the sunset views from your own private roof terrace with pool, whilst sharing in the profitability of this fabulous boutique hotel. Just seven magnificent residences remain, for more information click here.

But on the downside, CSR was a big casualty, down over 16 pct in value with a 127 pence drop to 653 after the bluetooth microchip designer reported record third-quarter revenue but lowered its forecast for fourth-quarter revenue.
   
The firm warned that fourth-quarter revenue was likely to be 160-180 mln usd, compared to previous guidance of 200 mln usd.
   
In reaction, Panmure Gordon downgraded CSR to 'hold' from 'buy' while Bridgewell Securities cut its stance to 'neutral' from 'overweight'.
   
Peer Wolfson Micro suffered in sympathy, losing 20-1/2 pence at 281.
   
And Shanks Group slipped 2 pence lower to 195-3/4 on profit-taking following a set of "satisfactory" interim results.
   
The waste management company said it expects to meet full-year forecasts after posting a rise in interim profits on the back of a strong performance in the Benelux countries.
   
For the six months to Sept 30, the company recorded a pretax profit before exceptional items of 19.7 mln stg compared to 17.5 mln last time, slightly above the analyst consensus figure of 19.5 mln stg.

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

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

AMSTERDAM - Market data at 10.10 am

Major indices
   
AEX                 495.79, down 0.89 points
AMX Midcap          632.93, down 0.42 points
Government bonds    Flat to lower

Major gainers
   
Wolters Kluwer rose 2.94 pct to 22.41 eur after better-than-expected third-quarter earnings
   
Getronics added 1.72 pct to 5.91 eur
   
Unilever rose 1.04 pct to 20.44 eur
   
Vedior put on 1.04 pct to 14.56 eur
   
Ordina added 0.98 pct to 15.45 eur

Major losers
   
ASML shed 1.03 pct to 18.26 eur
   
Ahold dropped 1.37 pct to 7.91 eur after reports that it has dropped plans to merge with Belgium's Delhaize
   
Wereldhave dropped 1.15 pct to 94.20 eur after reporting 9-months earnings
   
VastNed Retail shed 1.66 pct to 68.20 eur

Trade shares for a living with Intelli-trend 250
Click Here to find out more.

FRANKFURT - Market data at 9.15 am

Major indices:

DAX down 0.34 pct or 21.72 points at 6,340.24
MDAX down 0.21 pct or 18.70 at 8,796.72
TecDAX down 0.37 pct or 2.60 at 702.64
Euro/dollar - 1.2768 usd down .0005

Top DAX risers

Henkel up 1.07 pct or 1.13 eur at 107.03, Q3 EBIT rises to 321 mln eur, beats consensus

MAN AG up 0.82 pct, or 0.60 at 73.45

SAP up 0.551 pct, or 0.82 at 160.24, to form research alliance with HP to improve business IT

RWE up 0.30 pct, or 0.23 at 77.96, Dusseldorf City to sell RWE stake

Volkswagen up 0.11 pct, or 0.09 at 81.34, CEO resigns, Audi's Winterkorn to succeed

Top DAX fallers

Deutsche Post World down 2.46 pct, or 0.55 at 21.77, Q3 EBIT up 40.1 pct but misses consensus

Deutsche Boerse down 1.11 pct, or 1.40 at 125.10

Infineon Technologies down 0.94 pct, or 0.09 at 9.53

Hypo Real Estate down 0.89 pct, or 0.45 at 49.85, Q3 pretax 140 mln eur just shy of consensus

Munich Re down 0.60 pct, or 0.77 at 127.73, rating cut by JP Morgan, Fox-Pitt, Kelton

Trade Forex, Indices and Shares with zero commissions and 1% margin. Live dealing prices stream into GCI's state-of-the art trading software. Just click on a price to trade currencies, S&P 500, Dow Jones Industrials, DAX 30, Nikkei 225, IBM, Vodafone, Microsoft, and much more. To register for a free demo account Click Here

PARIS - Market data at 10.13 am:

Major indices:
   
CAC-40 down 16.46 points or 0.30 pct at 5,421.32
SBF-80 up 14.33 points or 0.22 pct at 6,415.97
SBF-120 down 9.40 points or 0.25 pct at 3,944.79

Volume: 532 mln eur
10 CAC-40 stocks up
30 CAC-40 stocks down
   
Major gainers:
   
EADS, up 0.42 eur or 2.03 pct at 21.08, rebounding from an initial decline after it reported an unexpected third quarter loss
   
Peugeot, up 0.68 eur or 1.46 pct at 47.34. Named former Airbus CEO Christian Streiff as its new CEO.
   
Veolia Environnement, up 0.27 eur or 0.46 pct at 48.57

Major losers:
   
Axa, down 0.46 eur or 1.46 pct at 30.30, as the market continued to assess its nine-month sales data that showed an 11.6 pct rise
   
Alcatel, down 0.12 eur or 1.16 pct at 10.24
   
France Telecom, down 0.18 eur or 0.89 pct at 20.15

Forex

ADVFN Services