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 09-10-2006
10/09/2006
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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 higher, rallying after opening falls; Shire leaps on drug news
Leading shares pushed higher in early morning trade, rallying after opening falls in reaction to pre-weekend profit-taking on Wall Street and worries over North Korean nuclear tests, with drugs firm Shire standing out after drug approval news, dealers said. At 9.21 am, the FTSE 100 index was 13.7 points firmer at 6,014.9, just below an earlier peak of 6,017.8, having recovered from an opening low of 5,994.8. The broader FTSE indices were mixed. Early volume was solid, with 226 mln shares changing hands in 22,010 deals swollen by demerger and IPO moves today. Pre-weekend on Wall street, the DJIA closed 16.48 points lower at 11,850.21 following three consecutive sessions of all-time highs, after lower than expected September non-farm payrolls, although an upward revision to the August figure tempered the disappointment. The Nasdaq composite index, meanwhile, finished 6.35 points weaker at 2,299.99, and the S&P 500 index was down 3.46 points at 1,349.58. In Asia today, Japanese markets were closed for a public holiday, so only the Hong Kong market could react to news that North Korea has conducted a nuclear test, triggering concerns over regional security and the likelihood of heightened political tensions. In reaction, the Hang Seng index finished its morning session down 220.03 points, or 1.23 pct, at 17,683.36. Meanwhile, oil prices rebounded above 60 usd in Asian trade after the North Korea nuclear test news and as OPEC's president reportedly called on fellow cartel members to cut production. In London, the main positive feature for blue chips early on was drugs group Shire, which jumped over 9 pct in value, a rise of 78-1/2 pence to 957-1/2 advance -- after news that the firm's collaborative partner, New River Pharmaceuticals Inc has received an approvable letter from the US Food and Drug Administration for its NRP104 compound for the treatment of paediatric Attention-Deficit/Hyperactivity Disorder. Responding to the news, UBS repeated its 'buy' advice and 1,050 pence price target on Shire saying the outcome is in line with the broker's forecasts and it will therefore not make changes at this stage. However, it added that it believes this decision removes an uncertainty around Shire's stock. And Goldman Sachs was similarly upbeat, pointing out that NRP104 will replace Adderall XR and as such this news is extremely positive, removing a major concern for investors. Goldman also repeated its 'buy' stance'. Other heavyweight drugs blue chips also moved higher today.
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GlaxoSmithKline shares added 126 pence at 1,461 after The Observer reported that the firm will this week file for approval in the EU for a radical new breast cancer drug, Tykerb which can be taken in tablet form. And shares in AstraZeneca took on 7 pence at 3,307 after the Independent on Sunday reported that the group has ramped up its 5 bln usd acquisition drive by inviting more than 60 venture capitalist firms to pitch companies they think the FTSE 100 giant would want to buy. The other main focus today was on demerger and IPO activity, with credit checking firm Experian starting 'when issued' trade today after its spin-off from GUS; waste management firm Biffa demerged from Severn Trent; and financial services firm Hogg Robinson floated once again. Experian shares were trading at 604 pence in early deals, above the 560 pence a share price at which the group's 800 mln stg additional share offering was priced yesterday, which had been towards the top of the expected 475 pence to 610 pence range. Former GUS shareholders will receive one share in Experian for every one they currently hold in the group, which is being renamed Home Retail Group. This gives GUS's remaining business, Home Retail Group (HRG), an implied value of 430 pence based on GUS's closing share price on Friday of 990 pence. GUS shares were temporarily suspended on Friday pending the start of unconditional trading in both companies due on this Wednesday. Both Experian and HRG will be included in the FTSE 100 index, so, as a result, online gaming group Partygaming -- which saw its share price plunge by over 60 pct in value last week after news that the US Congress had passed an anti-internet gaming bill -- will be demoted to the mid caps. Partygaming will displace peer 888 Holdings, which will be knocked back to the small caps after a similar share price drop last week. However, shares in both firms managed to rally today - Partygaming adding 0-1/2 pence at 42, and 888 shares up a penny at 106 helped by weekend press talk of possible sector consolidation. Back with demergers, Biffa shares also enjoyed a good stock market debut, rising to 280 pence from an indicated demerger price of 260 a share. Ahead of the demerger, Cazenove said last week that it valued Biffa shares at 245 pence each, while Seymour Pierce expected Biffa to start trading at between 210 and 240 pence per share. Severn Trent shareholders received one new Biffa share for each old share held, the shares were consolidated on a two for three basis, and 576 mln stg of surplus capital has been returned, equivalent to 165 pence per old share. Severn Trent shares, however, eased back 9 pence to 1,408 as two brokers cut ratings today. Utilities were also active today as Osprey Acquisitions raised its agreed offer for mid cap water firm AWG to 1,578 pence a share from 1,555 pence a share, after acquiring an additional 9.64 pct stake in the UK company and increasing its holding to 21.1 pct. The move effectively killed off any hopes for a counter-bid, according to traders, and in reaction AWG shares lost 7 pence at 1,601.
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On the IPO front, Hogg Robinson saw strong demand after its much-delayed flotation, rising to 97 pence against a 90 pence strike price in hefty volume of 95 mln shares traded. Back among the blue chips, ITV shares were a top faller, down 2-1/2 pence to 100 after being downgraded to 'neutral' from 'buy' by UBS in a cautious review of the UK advertising market. The broker said that while committed to its long-term investment case for ITV, based on regulatory and content upside potential, it has downgraded its rating to reflect the risk of further significant downgrades in 2007. And broker comment also knocked BT Group shares 3-1/4 pence lower to 263-1/2. Goldman Sachs added the stock to its 'Conviction sell' list in an otherwise mainly positive review of the European telecoms sector. Goldman upgraded its sector stance to 'neutral' from 'cautious'. Meanwhile ING downgraded its stance on BT Group to 'sell' from 'hold' at ING, telling clients it is time to take profits in the telecoms group. Staying in the telecoms sector, on the second line shares in Colt Telecom shed 2-3/4 pence at 138 after Goldman Sachs downgraded its rating to 'sell' from 'neutral' in its sector review. But on the upside with mid caps, shares in discount clothing retailer Matalan added 4-1/2 pence at 187 after The Sunday Telegraph reported that the firm will be forced this week to accept a 200 pence-a-share bid from John Hargreaves, the company's founder and chairman, for the 47 pct of the company that his family does not already own.
UK Diary of Events
For a diary of key financial and corporate events today, click here
US Summary
For a summary of US stocks at Friday's close of trade, click here
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Paris |
PARIS - Market data at 9.29 am:
Major indices: CAC-40 down 12.97 points at 5,269.09 SBF-80 down 15.22 at at 5,998.99 SBF-120 down 9.37 at 3,813.77
Volume: 210 mln eur 5 CAC-40 stocks up 35 CAC-40 stocks down
Major gainers: Soitec, up 0.58 eur or 3.2 pct at 18.58 and bouncing from last week's selloff after the company reaffirmed its full year guidance this morning, following speculation that tough market conditions would force it to abandon the targeted 400 mln eur of revenues. Ingenico, up 0.14 at 16.85 after signing partnership for fuel dispensing payment services with Gilbarco Veeder-Root. Arcelor-Mittal, 0.27 up at 28.89, building on last week's gains, seen amid signs of further steel sector consolidation after India's Tata said it would study a bid for Corus Group.
Major losers: EADS, down 0.26 or 1.3 pct to 20.17 and continuing to suffer from the crisis at Airbus, where CEO Christian Streiff is reportedly threatening to resign unless he secures EADS approval for a deep restructuring plan. Dassault Systemes, down 0.66 at 42.76 after a downgrade to 'hold' from 'buy' by Deutsche Bank. Saint-Gobain, down 0.55 at 57.40 after Societe Generale cut the stock to 'hold' from 'buy', largely on fears of the impact a US housing market slowdown could have on earnings.
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Frankfurt |
FRANKFURT - Market data at 10.22 am
Major indices: DAX 30 - down 24.90 points or 0.41 pct at 6,060.92 MDAX - down 66.20 points or 0.77 pct at 8,478.58 TecDAX - down 0.56 point or 0.09 pct at 652.04 DAX future - down 22.50 points at 6,102.00
Major losers BMW, down 0.53 eur or 1.25 pct at 41.87, amid news group unit sales rose a mere 0.4 pct year-on-year in September, with Mini brand sales down 9.8 pct Henkel, down 1.17 eur or 1.07 pct at 108.15 Deutsche Postbank, down 0.63 eur or 1.04 pct at 59.80 Deutsche Telekom, down 0.13 eur or 1.03 pct at 12.50
Major gainers MAN, up 2.21 eur or 3.26 pct at 70.03 on reports that the German truckmaker will today withdraw its 9.6 bln eur hostile bid for Swedish rival Scania to enable three-way friendly talks over a truck alliance with their joint largest shareholder, Volkswagen RWE, up 1.23 eur or 1.60 pct at 78.18 amid a report The Independent on Sunday that a consortium led by Qatar's state investment fund is preparing a knock-out bid for RWE unit Thames Water worth as much as 8 bln stg
Deutsche Boerse, up 0.80 eur or 0.65 pct at 123.11 Linde, up 0.40 eur or 0.53 pct at 75.20
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Forex |
Singapore 0738 GMT |
Sydney 0350 GMT |
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US dollar |
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yen 119.16 |
up from |
119.15 |
sfr 1.2602 |
down from |
1.2603 |
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Euro |
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usd 1.2600 |
down from |
1.2601 |
sfr 1.5868 |
down from |
1.5882 |
stg 0.6744 |
up from |
0.6737 |
yen 150.09 |
down from |
150.15 |
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Sterling |
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usd 1.8675 |
down from |
1.8707 |
yen 222.45 |
down from |
222.83 |
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Australian dollar |
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usd 0.7436 |
up from |
0.7422 |
stg 0.3981 |
up from |
0.3968 |
yen 88.62 |
up from |
88.40 |
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Advfn Plc, 26 Throgmorton Street, London, EC2N 2AN +44 (0) 870 794 0236
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