UK/Euro Financial Market Daily Morning Briefing 09-10-2007

Keep up to date with the emerging markets!  Click Here.

London shares turn up after opening down, ahead of pre-budget report

Leading shares turned higher after opening lower as investors await the first pre-budget report by UK Chancellor Alistair Darling and after Wall Street finished weaker overnight, with eyes also on the FOMC minutes later today, and with Northern Rock a major gainer in the blue chips on reports of bid talk.
   
At 9.07 am, the FTSE 100 index was 24.3 points higher at 6,565.2 having recovered from an earlier low of 6,527.5 after closing yesterday down 54.9 points at 6,540.9.
   
All broader indices were also higher. Volume was average with 218 mln shares changing hands in 58,217 deals.
   
"Nothing really stands up today with Northern Rock up again on bid rumours. However, momentum is building in the US, with the tech-dominated Nasdaq continuing to gain which could be also a sign of caution with the last time we saw tech euphoria in 1999 ended in a bear market with the bursting of the bubble in 2000," said Tom Hougaard, chief market strategist at City Index.
   
Overnight in Wall Street, stocks finished a quiet session mostly lower as investors cashed in some gains from last week's rally and readied for quarterly corporate earnings reports.
   
The Dow Jones Industrial Average index ended the day down 22.28 points at 14,043.73, the Standard & Poor's 500 index fell 5.01 at 1,552.58 while the Nasdaq composite index gained 7.05 at 2787.37.
   
Today in the US, the minutes of the Federal Open Market Committee's meeting of Sept 18 are expected to give some insight as to how the Fed made its decision to cut the federal funds rate by a half percentage point, and might even reveal the existence of a split opinion.
   
It is also the start of the US third quarter earnings season today with Alcoa set to release earnings news.
   
On Asian markets, the Hang Seng index closed the morning up 6.19 points at 27,776.48 while the Nikkei 225 Stock Average ended the morning up 157.05 points at 17,222.09.
   
In Asian trading hours, oil prices continued to fall in Asian trade on Tuesday as the market focused on rising supply and a stronger US dollar.
   
New York's main oil futures contract, light sweet crude for delivery in November, was 17 cents lower at 78.85 usd per barrel in morning trade. The contract plunged 2.20 usd to 79.02 usd per barrel in late US trading on Monday.
   
Brent North Sea crude for November delivery was 22 cents lower at 76.36 usd per barrel after dropping 2.32 usd in London.

FuturesBetting.com is the first Spread Betting company to offer Direct Market Access functionality. The spread betting platform provides you with sub 1 second fills, ultra tight spreads and depth of market/level 2, while allowing you to join the market bid & offer and place your stops anywhere. Click here.

In UK economic news, this summer's financial market turmoil means there is little room for UK Chancellor Alistair Darling to manoeuvre in when he delivers the Pre-Budget report today.
   
He has already hinted that he will have to deliver the bad news that economic growth next year will be below predecessor Gordon Brown's forecasts, and this is likely to mean that the government will need to borrow more than it anticipated to fund their spending commitments.
   
Elsewhere, the UK's global trade in goods deficit is expected to have improved slightly to 6.9 bln stg in August, after widening last month to 7.1 bln.
   
Turning to the blue chip gainers, Northern Rock was the top riser, up 13 at 185.5 after the FT reported that Lone Star, the US buy-out firm, has joined the growing list of potential bidders for the embattled bank.
   
Barclays edged 2 higher 664 after Deutsche Bank resumed coverage on the group with a 'buy' stance and price target of 740 pence.
   
Peers were also higher, Alliance & Leicester was up 10-1/2 at 783-1/2, HBOS gained 1 at 957-1/2.
    
In the utility sector, Severn Trent was up 29 at 1,462 on reports that Australia's Challenger Financial Services Group said that a consortium that it leads has acquired UK water and sewerage company Southern Water Capital Ltd for 4.195 bln stg.
   
Peer United Utilities was 5-1/2 higher at 719-1/2.
   
Also in M&A activity, Friends Provident was up 2.3 at 176 and Resolution  gained 5 at 687 rallying on merger hopes.
   
Turning to the downside, J Sainsbury was a major loser, down 5 at 579 after the FT reported that with reports in the FT that the Sainsbury family may derail the Delta Two bid.
   
The report said that the Sainsbury family was threatening last night to derail Delta Twos 10.6 bln stg bid proposal for the supermarket chain unless the Qatari-backed investment fund succeeds in hammering out an agreement with the pension trustees about future funding during the coming days.
   
SG Securities downgraded the group  to 'hold' from 'buy' with a maintained target of 600 pence.
   
And Reuters fell back 4-1/2 at 645-1/2 amid speculation that Thomson's bid for Reuters could be delayed after the European Commission ruled the deal should be subject to a more in-depth probe.

*In August 2006 Dr G. invested £1,550.00. In October 2007 his investment is worth £3,150.00, a gain of 100% in 13 months

*In June 2006 Mrs. T invested £4,750.00. In October 2007 her investment is worth £9,350.00, a capital gain of 97% in 15 months.

Tax Free

For a free brochure click here.

Elsewhere, miners were down following lower prices with Lonmin the top faller down 83 at 3,465, Antofagasta was off 17 at 793-1/2, Kazakhmys was down 23 at 1,479, Vedanta Resources fell back 20 at 2,066 and Anglo American edged 32 lower at 3,223.
   
Housebuilders were also out of favour as UBS downgraded the European home construction sector to 'neutral' from 'overweight' with Taylor Wimpey cut to 'neutral' from 'buy', down 5-3/4 at 281-3/4 and with midcap group Redrow cut to 'sell' from 'neutral' off 15-1/4 at 391-3/4
   
Peer Persimmon was off 16 at 1,024 and Barratt Developments fell back 4 at 1,492.
   
In the second liners, LogicaCMG was the top riser up 9-1/4 at 160-1/2 following news BT strategy chief Andy Green is to become its new CEO, with  Landsbanki terming the move a "strong appointment" and reiterating its 'buy'  rating.
   
After a trading update, Carpetright gained 49 to 1,210 following its confirmation that chairman and chief executive Lord Harris has made a revised non-binding offer for the company.
   
And Greggs was up 145 at 4,795 after the group reported like-for-like sales in the 16 weeks to Oct 6 have grown by 5.9 pct, including core volume growth of 1.8 pct, helped by favourable weather in August and September.
   
On the downside, Randgold Resources fell back 26 to 1,546 after HSBC cut the group to 'neutral' from 'overweight'.
   
HSBC pointed out that gold equities have moved to a premium, with rising costs and appreciating currencies set to constrain September earnings.

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

Massive 85% Successful Trades. Over £1,300 Profit

All this in just 1 month with as little as £1,500 Investment
Join our unique winning trading strategy
Register your details today and start receiving your FREE month of emails with clear Buy/Sell signals.

Click here equitytrades4u.co.uk

MILAN - Market data at 9.50 am:

Main indices
   
Mibtel at 31,727, up 0.34 pct
   
S&P/Mib at 40,783, up 0.25 pct

Main S&P/Mib gainers
   
Luxottica up 3.80 pct at 25.65 eur as Citigroup started the stock with a 'buy' stance and a target of 30.5 eur
   
Alitalia up 2.79 pct at 0.841 on news troubled airline is to pursue  contacts with six groups to ascertain their interest in buying a stake in the carrier
   
Unipol up 2.05 pct at 2.6125 as JP Morgan initiated coverage with an 'overweight' stance and a 3.30 eur target
   
Finmeccanica up 1.14 pct at 20.47 eur
   
Pirelli up 1.07 pct at 0.8425

Main S&P/Mib losers
   
Italcementi down 0.80 pct at 17.26, retracing after yesterday's gains
   
Parmalat down 0.67 pct at 2.665
   
Banco Popolare down 0.64 pct at 17.33
   
Tenaris down 0.55 pct at 18.70
   
Unicredito Italiano down 0.46 pct at 6.265

Other stocks in the news
   
Safilo up 4.90 pct at 3.575 as Citigroup started the stock with a 'buy' stance and a 4.4 eur target
   
Tiscali up 1.38 pct at 2.135 as CA Cheuvreux upgraded the stock to 'outperform' from 'underperform' as it revised its estimates to account for the integration of Pipex, restructuring costs and a 150 mln eur rights issue by the end of the year. The target was raised from 2.40 eur to 2.55 eur.

Situated in the heart of Sheffield's trendy Devonshire Quarter.  Invest in the UK's fastest growing city outside London. Limited availability of apartments in such a central location, make this an unmissable opportunity!  Prices are from just 88k.  For more information click here.

FRANKFURT - Market data at 10.02 am

DAX - down 0.54 points, or 0.01 pct, at 7,973.83
MDAX - down 47.23 points, or 0.44 pct, at 10,589.19
TecDAX - up 3.31 points, or 0.33 pct, at 996.80
DAX futures - down 13.00 points, or 0.16 pct, at 8,043.00
   
Major Decliners:
   
ThyssenKrupp, down 0.83 eur, or 1.83 pct, at 44.41, after MDAX-listed peer Kloeckner & Co issued a profit warning last night saying its full-year operating profit will be hit by the "unsatisfactory" development of the price of some steel products including stainless steel in the third quarter
   
Deutsche Boerse, down 1.27 eur, or 1.21 pct, at 103.56, as demand for the German Stock exchange's shares has eased after weeks of strong gains
   
Merck, down 0.66 eur, or 0.74 pct at 88.79, after WestLB lowered its price target to 109 eur per share from 124 maintaining its 'buy' rating, and Citigroup lowering its price target to 109 eur per share from 124, also reiterating its 'buy' rating
   
Deutsche Bank, down 0.58 eur, or 0.61 pct, at 94.56, as investors might be worried about costs associated with bid by a consortium it leads in the bidding for Arcandor AG's department store properties
   
DaimlerChrysler, down 0.44 eur, or 0.61 pct, at 71.97
   
Major Climbers:
   
Adidas, up 0.40 eur or 0.92 pct, at 44.10, rebounding from losses yesterday
   
Fresenius Medical Care, 0.32 eur, or 0.88 pct, at 36.62, as the euro has eased against US dollar helping out the dialysis company, which does much of its business in the US
   
SAP, up 0.22 eur, or 0.57 pct, at 30.19, rebounding from strong losses yesterday due to the announcement of a friendly bid for French peer Business Objects SA, its biggest single purchase ever.
   
Commerzbank, up 0.17 eur, or 0.57 pct at 30.19
   
Detusche Telekom, up 0.17 ewur or 0.57 pct at 30.19

Other Shares in Focus:
   
MDAX-listed Salzgitter, down 4.31 eur, or 2.94 pct, 142.50, after steel peer Kloeckner & Co issued its profit warning last night
   
MDAX-listed Kloeckner & Co, down 12.09 eur, or 24.68 pct, at 36.89, plummeting on news of its profit warning
   
TecDAX-listed Conergy, down 0.74 eur, or 1.23 pct, at 59.38, after Deutsche Bank downgraded its stance on to 'hold' from 'buy' while maintaining its price target at 70 eur, saying that major management changes the solar power specialist announced yesterday could have short-term negative effects with a later positive impact.

LOW-RISK, AWARD-WINNING, INVESTMENT STRATEGY
 
£2,000 to over £80,000 Tax-Free

Click Here

AMSTERDAM - market data at 10.33 am

Major indices
   
AEX 547.34, up 0.28 pct
AMX Midcap 733.13, up 0.27 pct
Government bonds mostly higher

Major gainers
   
Hagemeyer surges 7.21 pct to 4.46 eur after Sonepar announces 4.25 eur per share offer that analysts at SNS say may succeed, while traders point to hope for a higher bid driving share price above the offer
   
Corporate Express gains 3.65 pct at 8.24
   
TomTom up 2.28 pct at 51.94
   
TNT rises 1.76 pct to 30.01
   
Philips 1.29 pct firmer at 31.35 amid news that LG Philips LCD, in which it holds over 30 pct, has reported its highest quarterly operating profit in over 3 years
   
DSM 0.59 pct stronger at 39.51 after announcing armour tie-up with Ten Cate, which added 0.54 pct at 29.59
   
ING puts on 0.09 pct at 32.07 amid press reports it is seeking strategic investor role in China Postal Savings
   
LogicaCMG soars 6.79 pct at 2.36 after announcing new CEO appointment, a move SNS welcomed in a note based on the new CEO's "more than convincing track record"
   
Van der Moolen 2.67 pct higher at 3.85 after announcing trading tie-up with GSFS Asset Management
   
Heijmans gains 2.05 pct to 34.39
   
Stork lifted 0.87 pct to 47.28 after announcing long-term Aerospace contract that could be worth a total of 600 mln usd depending on sales
       
Major decliners
   
ArcelorMittal sheds 1.76  pct at 53.54 eur
   
ABN Amro down 0.26 pct at 37.88
   
Akzo Nobel surrenders 0.40 pct at 59.76 while ABN Amro analysts, referring to yesterday's dividend and buy-back announcements, said in a note that "we get the feeling Akzo still has more cards up its sleeve with regards to positive news flow in the coming weeks"
   
Fugro falls 2.49 pct to 58.07 following downgrade to 'hold' on valuation grounds at ABN Amro
   
Corio down 1.94 pct at 60.75 after downgrade to 'sell' in Merrill Lynch real estate review

ADVFN Services