UK/Euro Financial Market Daily Morning Briefing 16-02-2007

24Hr Forex Trading. No commissions. Minimum deposit $100.
Trade EUR / GBP /USD / JPY / CHF & more. Join Now

London shares open lower, weak miners weigh, Compass trading news pleases

Leading shares were slightly lower in early deals, with a weak mining sector outweighing positive trading news from Compass Group and broker upgrades on Kingfisher and Next, dealers said.
    
By 9.10 am, the FTSE 100 index was down 5.5 points at 6,427.8, while the broader indices were mixed.
    
Early volume was moderate, with 211.2 mln shares changing hands in 39,681 deals.
    
US stocks extended their February rally last night, with investors growing confident that interest rates will hold steady even as Federal Reserve Chairman Ben Bernanke tempered his forecast of slowly cooling growth and inflation with a reminder that price pressures remain a concern, traders said.
    
The DJIA climbed 23.15 to a record close of 12,765.01, after reaching a new trading high of 12,779.03, while the Nasdaq rose 8.72 points to 2,497.10.        After the bell however, Microsoft's chief executive Steve Ballmer said Wall Street's current expectations for revenue from its newest operating system may be too "optimistic".
   
Overnight across Asia, the Nikkei 225 index closed 21.58 points lower at 17,875.65, while the Hang Seng ended 29.49 points higher at 20,567.91 ahead of the Chinese New Year.
   
In London, mining stocks were under pressure in early deals, with sentiment hit by news that the Chinese central bank has once again raised its reserve requirement, heightening concerns over demand in the region.
   
The central bank said reserve requirements have been raised by 50 basis points, which would bring the reserves most banks would have to maintain up to 10 pct.
    
"The news will increase fears that growth in China could be capped and this will hit commodity prices." A London-based trader said.
    
Rio Tinto lost 48 pence to 2,786, Anglo American eased 42 pence to 2,528, Vedanta fell 21 pence to 1,283 and BHP Billiton drifted 17 pence to 1,078.

Trade online. Plus great customer service!
Trade stocks, FX, CFD’s, futures and more. Worlds best trading platform according to Euromoney. Easy to use. Solid charting. Technical analysis. Personal account manager. Advice and recommendations. Chat, email and phone access. Don’t wait. Act now! Download free trial.

Click Here.

Sainsbury shares were also weaker, down 3 pence at 505-1/2, following a report in the Times that Cinven has abandoned plans for a rival consortium to bid for the food retailer after its partner Texas Pacific Group joined the CVC-led team that is planning a takeover proposal.
   
Citing sources, the newspaper said that with Sainsbury's share price above 500 pence, Cinven has decided not to proceed.
   
Elsewhere, Reed Elsevier shares were down 12 pence at 632-1/2 after Lehman Brothers downgraded the media group on valuation following yesterday's sharp gains following its disposal plans for its Education unit.
   
Lehman told clients that while the disposal is positive in terms of the future quality of Reed's earnings, in the short-term, it is likely to be dilutive.
   
Smith & Nephew was also hit by negative broker comment, easing 4 pence to 623-3/4, after ING downgraded its rating on the medical devices group to 'hold' from 'buy' on valuation.
   
The broker noted that although the group's new hip resurfacing product BHR appears to be delivering results, it believes the shares now adequately reflect this and it also sees little prospect of a private equity offer.
   
Compass Group topped the early risers however, after an upbeat AGM statement, with the world's largest catering group revealing that trading in the first four months of the year has been "encouraging" and is "marginally" ahead of expectations.
  
The group added that the process of selling its European vending business, Selecta, is "well underway and has generated significant interest".
   
As previously stated, it expects to complete the transaction by Summer 2007.
   
Kingfisher was another gainer, up 5-1/4 pence at 256-1/4, as SG Securities upgraded the UK electrical retailer to 'buy' from 'sell' ahead of a fourth-quarter trading update next week.
   
In a note to clients, the broker said after a 40 pct underperformance, Kingfisher is the best hidden value play in the European retail sector, with the worst over in the UK and sales and gross margin on a positive trend.
   
Next was also upgraded this morning, to 'buy' from 'neutral' by Goldman Sachs as the broker reviewed the speciality apparel and accessories sector.

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.

Goldman said that it conducted a survey of consumers in six major European apparel markets, which highlights that quality is becoming more important.
   
Elsewhere, Intercontinental Hotels also benefited from upbeat broker comment, with Dresdner Kleinwort initiating coverage on the group with a 'buy' recommendation as part of an industry review in which the broker started the European hotel sector at 'overweight'.
   
Broker comment also influenced the midcaps today, with Hiscox adding 12 pence to 272-3/4 and Amlin gaining 2 pence to 315-3/4 after both being upgraded to 'buy' at ABN Amro this morning as it reviewed the UK insurance sector.
   
Shares in Renishaw were also higher, gaining 30 pence to 754 after Merrill Lynch initiated coverage on the group with a 'buy' stance and a price target of 900 pence.
   
On the economic front, US wholesale inflation is seen falling 0.5 pct in January, as measured by the Labor Department's Producer Price Index.
  
Meanwhile housing starts are seen falling to a seasonally adjusted annual pace of 1.6 mln units in January, while permits are seen falling to a 1.58 mln unit pace.
   
After the opening bell, consumer sentiment, as measured by the University of Michigan, is seen rising slightly to 97 in early February from 96.9 in late January.

UK 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

According to The Times newspaper, one of our products rose in value by 90%* last year and our market outstripped the FTSE 100 by 36.1 %.*

For a free information pack about a tax free market that consistently performs for investors, click here.

*Source The Times, December 15th 2006

PARIS - Market data at 9.46 am:

Major indices:
   
CAC-40 down 14.79 points at 5,706.09
SBF-80 down 16.31 at 7,087.36
SBF-120 down 10.42 at 4,182.49

Volume: 683 mln eur
26 CAC-40 stocks up
11 CAC-40 stocks down
3 unchanged

Major gainers:
   
Michelin, up 3.25 eur or 4.1 pct at 83.25 and building on yesterday's 6.7 pct surge and trading at all-time highs, as investors anticipate that cost-cutting efforts and tire price increases will offset the risk of high raw material costs this year.
   
Gecina, up 9.70 or 7.0 pct at 147.60 after the property group posted late yesterday a 2006 net profit of 1.778 bln eur, up from 600 mln the year before.
   
Capgemini, up 0.25 or 0.5 pct at 53.85 and adding to the sharp rise seen after yesterday's release of better than expected 2006 earnings, with an upgrade to 'overweight' from JP Morgan today offsetting a downgrade to 'neutral' from UBS.
   
Major losers:
   
Bouygues, down 0.60 or 1.1 pct at 54.35 as HSBC analysts downgraded the stock to 'neutral' from 'overweight' on valuation grounds, while raising its price target to 58 eur from 55 eur.
   
Imerys, down 1.60 at 71.35 and extending yesterday's declines as Citigroup analysts cut their rating on the stock to 'hold' from 'buy' after its release of lower than expected 2006 results.
   
BNP Paribas, down 1.20 or 1.2 pct at 82.50, sliding further in the wake of yesterday's disappointing 2006 earnings, which showed a sharp slowdown in French retail banking results in the last quarter.

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

Click Here

AMSTERDAM - Market data at 10.10 am

Major indices
   
AEX                 507.32, down 0.45 point
AMX Midcap          714.22, down 2.42 points
Government bonds    slightly lower

Major losers:
   
Pharming dropped 3.93 pct at 3.67 after the Dutch biotech group posted "disappointing" results for 2006
   
Nutreco fell 2.37 pct at 51.60 as various brokers downgraded the stock following yesterday's results
   
Reed Elsevier was off 0.62 pct at 14.42 a downgrade to 'equal-weight' from 'overweight' by Lehman Brothers
   
Getronics dropped 1.28 pct at 6.94
   
Major gainers:
   
Akzo Nobel put on 1.54 pct at 46.71 after yesterday's slide
   
DSM also regained some of the falls earlier in the week, adding 0.86 pct at 35.01
   
Van der Moolen put on 1.59 pct at 4.48

Save up to 50% on Jermyn Street style shirts and accessories, from silk ties to silver cufflinks, by shirt-maker Joseph Turner.
Click Here

ADVFN Services