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 09-02-2006
02/09/2006
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ADVFN III |
Morning Euro Markets Bulletin |
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Daily world financial news from AFX/Marketwatch |
Supplied by advfn.com | | |
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London
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London shares open sharply higher as BG beats expectations; BoE eyed
Leading shares moved higher in opening deals, mirroring strong gains on Wall Street overnight, with BG surging over 10 pct on better-than-expected fourth-quarter profits, dealers said.
At 9.00 am, the FTSE 100 was 47.5 points firmer at 5772.6, reflecting the buoyant wider market mood. Meanwhile, on Wall Street, US stocks ended higher as strong earnings from Cisco Systems and a rally in Pfizer shares on a possible disposal of its consumer products unit contributed to a triple-digit gain on the Dow Jones Industrial Average. The DJIA closed just off its high for the session, up 108.86 points at 10,858.62, the Nasdaq rose 22.02 points to 2,266.98 while the S&P 500 Index climbed 10.87 points to 1,265.65. And today, investors will scrutinise weekly jobless-claims data, with most economists expecting claims to rebound 11,000 to 284,000 in the latest week. The positive mood spilled over into Asia overnight as the Nikkei 225 index closed up 166.99 at 16,439.67 while the Hang Seng index was 63.19 higher at 15,436.63 by midday. Back in London, on the economic front, the BoE is poised to keep borrowing costs unchanged for the sixth month running when it concludes its rate-setting meeting at noon. All 34 forecasters polled by AFX News expect the nine-member Monetary Policy Committee to leave the key repo rate at 4.50 pct. Other economic data due for release include December trade data and new construction orders. Turning to equities, BG was the top performer after the oil heavyweight unveiled forecast-busting earnings and set ambitious production targets going forward.
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According to Morgan Stanley, operating profit of 858 mln stg was 7.7 pct above consensus and net income of 504 mln came in almost 9 pct better than expected. Furthermore, both E&P and LNG beat expectations materially and the balance sheet is in a net cash position. The group also raised its 2006 production target again and introduced new, strong volume growth and LNG targets for the period to 2009 and 2012. Morgan Stanley said whilst its earnings and valuation are based on 3 pct long term volume growth, the company is indicating it can double that so earnings will need to be revised. Meanwhile, Merrill Lynch highlighted the group's M&A potential as it reiterated its 'buy' advice and 650 pence target. Shares in the group were 63 pence higher at 680-1/2. Still in earnings, Unilever was also in demand after the Anglo-Dutch consumer goods giant reported a 28 pct rise in full-year earnings, helped by a reduction in one-off charges and as increased marketing spend boosted sales. Dealers said sales were well above expectations with organic sales growth of 5 pct exceeding the consensus forecast of 3.3 pct. Unilever gained 8 at 607. Better-than-expected figures also provided a fillip to BT, 2-1/2 to the good at 215For the nine months to Dec 31 pretax rose to 568 mln stg from 558 mln a year earlier, with revenue up 8 pct to 4.94 bln.
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The average analysts' forecast was for underlying pretax profit of 490 mln stg on revenue of 4.87 bln stg against 4.58 bln last time. In response, Morgan Stanley said although it has not changed its full year EPS estimates at this stage there may be scope for a small upgrade depending on the new guidance for full year depreciation. Elsewhere, consolidation hopes lifted the tobacco sector as the Daily Mail reported Imperial Tobacco is mulling a bid for Franco-Spanish peer Altadis. According to the newspaper, executives from both companies met in London on Tuesday to tie up an agreed takeover deal. Imperial Tobacco took on 48 at 1743, BAT gained 26 at 1309 and Gallaher added 16 at 905. Still in M&A, BAA continued to benefit from news yesterday after Spain's Ferrovial said it was considering making a cash bid for the UK airport operator. This morning Goldman Sachs, which rates BAA 'outperform' said any bid could be as high as 900 pence per share with Deutsche Bank arguing the price could be as high as 940 pence as it upped its price target to 713 pence. Miners also rebounded from selling yesterday as gold moved higher overnight with Kazakhmys 13-1/2 firmer at 833, Anglo American up 32 at 2044, Xstrata took on 21 at 1589 and Rio Tinto was 28 higher at 2809. In contrast, Rolls Royce fell back 11-3/4 at 431-3/4 as a subdued outlook offset slightly better-than-expected full year numbers. The engineer said underlying pretax profits lifted to 584 mln stg, above analysts' expectations of 579 mln stg. But Panmure Gordon said the stock has had a good run and with the dividend being slightly lighter than expected it expects the shares to pause for breath. Fellow faller Tesco was hit as investors fretted over news the supermarket plans to spend up to 250 mln stg a year to enter the highly competitive US market with a new chain of convenience stores.
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On the second-line, Group4 Securicor was boosted by much better-than-expected results from Swedish peer Securitas, which also revealed it is to spin off three of its divisions. Broker comment lifted Great Portland Estates as Merrill Lynch upgraded the property group to to 'buy' from 'neutral'. The broker said the move reflects a combination of rental growth, yield compression and higher estimates for the company's development programme. In retail, Woolworths was supported by a report Icelandic investment group Baugur has built a 7 pct stake in the group. Shares took on 3/4 at 36-1/2. And vague consolidation talk lifted housebuilders after the FT reported rumours of an 860 pence per share bid for Bovis, with Redrow named as a possible suitor. Redrow was up 16-1/4 at 571-1/4, Crest Nicholson firmed 7-1/4 at 468-1/4 with Bovis 6-1/2 firmer at 824.
Diary of Events
For a look at key financial events in the UK today, click here
US Summary
For a summary of US stocks at the close of trade, click here
Amsterdam
AMSTERDAM - Market data at 08.26 GMT
Major indices AEX index 455.32, up 2.70 points AMX Midcap index 575.95, up 3.37 points Government bonds Broadly lower
Major gainers
SBM Offshore led gainers, adding 2.54 pct to 82.75 eur Second-liner Crucell gained 1.58 pct to 21.26 eur after it said 96.5 pct of Berna Biotech shares have been tendered ABN Amro added 1.89 pct to 24.24 eur after the bank said it will start its 600 mln eur share buyback programme today. The buybacks are to end on June 30. Unilever was up 1.37 pct to 59.35 eur after reporting solid Q4 results and giving off a positive outlook, and the intended sale of its deepfreeze activities. ASML added 1.06 pct to 19.05 eur. Buhrmann added 0.22 pct to 13.61 eur, off earlier highs after the company reported higher Q4 results and gave off a well-received full-year outlook. Heijmans added 1.17 eur to 39.70 eur on news that it is outsourcing most of its IT operations to Atos Origin.
Stork put on 0.50 pct to 40.04 eur after NPM dropped its request for an investigation into Stork after talks between the two companies. Local issue Exact rose 2.22 pct to 27.20 eur after reporting Q4 and full-year results.
Major losers
Numico edged 0.03 pct lower to 37.37 eur Akzo Nobel slipped 0.07 pct to 43.67 eur Heineken shed 0.14 pct to 28.54 eur TNT dropped 0.33 pct to 27.41 eur Ahold lost 1.17 pct to 6.76 eur DSM fell 3.32 pct to 35.81 eur after reporting disappointing Q4 results and handing the market a cautious outlook on the first quarter. A number of brokerages subsequently lowered their recommendations or put their ratings under review.
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Forex
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London 0909 GMT |
Singapore 0720 GMT |
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US dollar |
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yen 118.55 |
down from |
118.70 |
sfr 1.2983 |
up from |
1.2973 |
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Euro |
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usd 1.1974 |
down from |
1.1981 |
stg 0.6875 |
up from |
0.6866 |
yen 141.96 |
down from |
142.18 |
sfr 1.5543 |
up from |
1.5538 |
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Sterling |
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usd 1.7417 |
down from |
1.7441 |
yen 206.48 |
down from |
206.98 |
sfr 2.2613 |
down from |
2.2620 |
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Australian dollar |
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usd 0.7415 |
up from |
0.7406 |
stg 0.4257 |
up from |
0.4245 |
yen 87.91 |
down from |
87.92 |
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