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

ADVFN would like to hear your views on overseas trading, whether you are actively investing in foreign stocks or not. We would be very grateful if you would take a few moments to fill out this short questionnaire (six questions). Click here.

London shares remained higher assisted by strength in the steel sector and a rebound by British Airways following yesterday's thwarted terrorist attack which sent the stock tumbling, dealers said.

At 9.06 am the FTSE 100 was up 19.4 at 5,842.4, with the wider market also positive.

Across the Atlantic US shares were buoyed by sharply lower oil prices and strong earnings from Target Corp, Viacom and American International Group despite news of a terror plot targeting commercial airlines.

Consumer stocks led the market's advance while energy stocks were the only sector to end the day lower.

The DJIA rose 48.19, or 0.44 pct, to 11,124.37.

Overnight on Wall Street two leading retail stalwarts -- J.C. Penney and discounter Target -- reported better-than-expected profits in the second quarter. Still, the outlook for consumer spending in the coming months remains muddled amid higher energy costs, rising interest rates, war in the Middle East, and the latest terrorist threat.

In Asia the Japan's Nikkei index ended the morning down 26.86 pts at 15,604.05 while in Hong Kong the Hang Sang tied the early session up 28.75 pts at 17,250.89.

Fears that an alleged terror plot, thwarted by British police, will hurt travel demand as well as the aviation industry sent oil prices tumbling in US trades overnight.

The UK airport bomb scare will mean stricter controls on hand baggage which could be bad news for low-cost airlines at a time when they are beginning to charge passengers for checked baggage to encourage them to carry more in the cabin, the Centre for Asia Pacific Aviation (CAPA) said.

Meanwhile, federal regulators ordered BP to conduct more rigorous tests of oil pipelines Thursday as the company said it might keep nearly half of the nation's largest oil field open despite leaks and severe corrosion.

In London steel was in focus with Corus taking a starring role on the leader board, up 5 pence at 387, following news that European peer ThyssenKrupp's third quarter pretax profit reached 806 mln eur, up 39.6 pct from 577 mln a year earlier as the steel conglomerate raises its sales guidance for 2006.

Use our professional platform to trade on margin and trade tax free. Speculate on Oil, Gold, Foreign Exchange, Worldwide Indices, Equities and Options. Go long or short on all our markets. Click here.

ThyssenKrupp said it now expects full year sales to reach roughly 46 bln eur, up from its earlier target of 44 bln eur.

Also on the upside there was a rush of blood to the head for a handful of miners as commodity prices climbed higher, Xstrata was 14 pence stronger at 2,256, Lonmin was 14 better at 2,688 while Anglo American was up 11 at 2,314.

Anglo's value was further boosted by the company reclaiming 348,456 shares.

BA managed to find its wings once again following a clipping yesterday, up 3-1/4 at 373-1/2, after it announced that the "vast majority" of its flights are due to operate today.

"While the airline is hoping to operate a near-normal schedule, it is advising customers that they still could face delays at the airport (London Heathrow) and that the security restrictions introduced yesterday on all UK airports remain in place," it said.

The airline expects all longhaul flights from London Gatwick to operate as well as all longhaul flights from London Heathrow with the exception of six services to the US, three flights to New York JFK and one each to Los Angeles, Washington and San Francisco.

On the downside, Schroders sank as the market digested a set of in-line results, with Bridgewell recommending the stock as 'neutral'.

The London broker said that Schroders' interim results were in line with its expectations, as a strong start to the year offset the more challenging second quarter conditions.

Institutional net outflows of 4.6 bln stg offset the retail inflows of 2.3 bln stg and private banking inflows of 0.3 bln.

Bridgwell concluded that overall the numbers were solid, and the company has defensive qualities that should be attractive to investors in the current market.

Tethers and Greenwoods was less democratic knocking the stock to 'hold' from 'buy'.

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

Meanwhile, AstraZeneca eased 10 pence to 3,202, pulled lower by smaller peer Skyepharma. The British drug delivery group, which is striving to recover from a turbulent six months, expressed disappointment with recent share price declines and stressed that it is not aware of "any fundamental reason" for the drop.
 
Shares in the company closed yesterday near record lows of 22.5 pence. The stock has lost 20 pct this month, and 55 pct so far this year.

"We are continuing our efforts to deliver on the strategy outlined earlier this year to divest our injectable unit and to out-license Flutiform outside the US and we remain confident that we will be able to achieve these objectives," chief executive Frank Condella said in a statement.

On the second tier, Enodis plumped 3 to 168 after being raised to 'buy' from 'hold' by Merrill Lynch as its bid situation continues to unwind.

Enodis yesterday rejected requests from Middleby Corp seeking a second extension to the takeover panel's 'put up or shut up' deadline of noon on Monday, and to grant additional due diligence access.

EasyJet was another winner bouncing off of yesterday's lull, up 3-3/4 at 417-3/4.
On the downslope, Premier Oil slipped 14-1/2 pence to 1,000-1/2 following the announcement that its Al Amir-2 well in Egypt is being plugged and abandoned, prompting Merrill Lynch to cut its net asset value (NAV) estimate for the group, dealers said.

The oil group said that although the well had confirmed oil flow at over 750 bopd, on test it flowed water and oil at sub-commercial rates and it has therefore decided to abandon the well.

US Summary:

For the latest UK small caps summary, click here

Diary:

For an up to date calendar and forward diary of events, click here

The Goldline trading system makes profitable trading now accessible to all! With Goldline you make no decisions - you make no mistakes. Click Here

Major indices:

    CAC-40 up 26.66 at 5,003.30
    SBF-80 up 28.06 at 5,468.24
    SBF-120 up 18.39 at 3,604.98

    Volume: 260 mln eur
    35 CAC-40 stocks up
    4 CAC-40 stocks down

Major gainers:

AGF up 1.85 at 96.70 as H1 net jumps

Michelin up 0.85 at 47.25

GDF up up 0.34 at 28.09

Major losers:

Bouygues down 0.33 at 38.55 as H1 telecoms sales disappoint

EADS down 0.23 at 23.10

Most active stocks:

Sanofi-Aventis down in 36 mln

AGF up 1.85 at 96.70 in 32 mln

Total 0.35 at 52.95 in 31 mln

Open a Selftrade Dealing account, pay a flat £12.50 for all transactions.
UK and international equities, funds, bonds, covered warrants and Listed CFDs. Instant account funding via debit card. No account or inactivity fees. Click here for more information.

Major indices:

    AEX                453.78, up 2.23 points
    AMX Midcap         567.88, up 5.74 points
    Government bonds   broadly lower

Major gainers:

Getronics firmed 2.39 pct at 5.15

Aegon up 1.34 pct at 13.63

Staffing groups were lifted by solid second-quarter results from peer Adecco, with Vedior firming 0.96 pct at 13.73, Randstad climbing 1.96 pct at 39.59 and USG People putting on 2.03 pct at 50.30

Aalberts jumped 4.85 pct to 60.50 after the engineering company posted better-than-expected first half results

Fugro climbed 1.62 pct at 34.44 after the oil services group reported better-than-expected first-half results and gave a buoyant outlook for the full year amid continued market demand and favourable conditions

Major decliners:

Boskalis lost 1.93 pct at 48.26 as the dredging company's "weak" full-year outlook offset a good set of first-half results

ING was the only blue chip faller, off 0.77 pct or 25 cents at 32.06, ex-dividend of 59 cents.

VastNed Retail fell 0.3 pct at 66.15 as investors failed to be inspired by its full-year outlook and slightly higher first-half result. VastNed Offices/Industrial tumbled 2.36 pct at 26.90 after slightly cutting its full-year outlook amid a drop in first-half results

Premium Bonds are an investment that offers the chance of a big tax-free win, with monthly prizes ranging from £50 through to two £1 million jackpots. Anyone aged 16 or over can purchase them, with purchase values ranging from the £100 minimum through to a £30,000 maximum. Click Here

Major indices:

    DAX 30 - 5,670.610, up 38.72 points or 0.67 pct
    MDAX - 7,863.28, up 21.84 points or 0.28 pct
    TecDAX - 631.89, up 10.80 points or 1.75 pct
    DAX future - 5,654.95, up 5.97 points or 0.11 pct
    Bund future - 116.55, down 0.21 points or 0.18 pct

Major risers:

Deutsche Bank, up 1.08 eur, or 1.28 pct at 85.77: Sector strength

Munich Re, up 1.14 eur, or 1.01 pct at 113.9: Sector strength

Allianz, up 1.14 eur, or 0.98 pct at 128.46: French unit Assurances Generales de France first half results exceeded market expectations.

Continental AG, up 0.54 eur, or 0.75 pct at 78.06

Commerzbank, up 0.13 eur, or 0.50 pct at 26.14: continued recovery
   
Major fallers:

ThyssenKrupp, down 0.09 eur, or 0.42 pct at 28.15: Investors lock in profits after the steel conglomerate's stock rose ahead of today's solid third quarter earnings and raised sales guidance.

Deutsche Telekom, down 0.05 eur, or 0.63 pct at 11.10: UBS downgrades rating to 'neutral' from 'buy', lowers price target to 12 eur versus 15.30. 

Deutsche Post, down 0.07 eur, or 0.37 pct at 18.84

TUI, down 0.07 eur, or 0.47 pct at 14.84: Raft of brokers cut price targets following yesterday's profit warning, with Goldman Sachs lowering its target to 11.60 eur from 13.40 and reiterating its 'sell' rating, UBS lowered its target to 13.50 eur from 14, reiterating its 'reduce' stance while Morgan Stanley cut its target to 12 eur from 14, reaffirming its 'underweight' rating.

Altana, down 0.15 eur, or 0.34 pct at 44.37

Forex Rates:

ADVFN Services