UK/Euro Financial Market Daily Morning Briefing 20-02-2006

London shares edge higher at open as bid fevers offsets Severn Trent

       
Leading shares edged higher in early deals as ongoing bid talk surrounding BOC and Kingfisher offset losses by Severn Trent after a weekend press report about accounting practices at the utility, dealers said.
   
At 9.00 am, the FTSE 100 was 2.6 points firmer at 5848.8, in contrast to the negative wider market.
   
In New York on Friday, shares shut for the long weekend on a downbeat note after inflation data suggested interest rates could rise further still.
   
The Dow Jones Industrial Average ended 5.36 points easier at 11,115.32, the Nasdaq off 12.27 to 2,282.36, while the S&P 500 Index ended 2.14 points lower at 1,287.24.
   
Today US markets will be closed for the Presidents' Day public holiday.
   
Overnight in Asia the mood was mixed as the Nikkei 225 closed down 275.52
points at 15,437.93, while the Hang Seng ended 122.98 higher at 15,598.67.
   
Back in London, on a relatively quiet day for blue chip news bid fever continued to fire up sentiment.
   
Kingfisher was the top riser, up 49 pence at 1750 after the Sunday Telegraph
reported that Lowe's, the world's second largest home improvement retailer, is
secretly plotting an assault on the European DIY market in a move that could see it swallow up the owner of B&Q.
   
BOC was another early winner on the back of a report in the Mail on Sunday that the company will announce an agreed 8 bln stg takeover this week by Linde, creating the world's biggest industrial gases group.
   
The paper said bankers for BOC received an approach from Linde's advisers last week proposing to raise the Germans' offer to 1,600 pence a share from 1,500 pence tabled last month.
   
BOC took on 31 at 1520.

Discover SG Listed CFDs  a new and enhanced way of trading Contracts for Difference

WED 1st March 2006 – 6- 7.30pm  at The London Stock Exchange

All attendees will be eligible for a free £100 trade*

For details visit  www.listedCFDS.com

* Terms & conditions may apply

M&A hopes also stoked up buying amongst blue chip miners following last week's approach for mid-cap Lonmin.
   
Xstrata was the main beneficiary on long-term talk the group might fall to the expansionist plans of cash-rich peer BHP Billiton.
   
As for Lonmin, investors continued to weigh in to the stock as the market tried to second-guess who the South African platinum miner's secret admirer is.
   
Press reports over the weekend suggest South Africa's Gold Fields is the predator but Xstrata and Falconbridge have long been mooted as eyeing up the group.
   
In response, Xstrata added 45 to 1746, Rio Tinto took on 35 to 2902 and Kazakhmys was 9 higher at 901.
   
BAA also took off, 4 higher at 826, on a report in Saturday's Daily Mail that Australia's Macquarie Bank is lining up its own bid consortium to rival Spain's Ferrovial's approach to the airport operator.
   
Elsewhere, a spike in the price of crude gave a lift to oil heavyweights, with BP 7-1/2 to the good at 663, BG 3 higher at 679 and Shell up 11 at 1884.
   
Crude jumped by more than 1 usd a barrel to 60.95 usd after militants in Nigeria threatened a new round of attacks against oil facilities as the African government tried to negotiate the release of nine foreign hostages.
   
On the downside, Severn Trent was out of favour after a Mail on Sunday report about its accounting practices. Severn Trent shares lost 18 to 1157.
   
Elsewhere, broker comment helped to dampen sentiment, with telecoms hard hit
by negative remarks from JP Morgan.
   
Vodafone was 1-3/4 lower at 122-1/2 and fixed-line peer BT was down 1-1/2 at
212-1/2 after the broker downgraded the stocks to 'underweight' from 'neutral' and 'neutral' from 'overweight' respectively.
   

One small company will single-handedly bring a new generation of wireless Internet to the world in 2006... and it’s NOT Wi-Fi...

They just signed a deal with Intel – which virtually guarantees their technology will become the industry standard this year!

And yet – few people know who they are... and hardly anyone has tapped into their potential...

Read all about them here

In a review of the European telecoms sector, JP Morgan said it sees substantial risk within the industry due to unbundled local loop (ULL) line growth.
   
Northern Rock was the biggest loser, off 26 at 1124, as Goldman Sachs and WestLB cut their ratings on the mortgage bank on valuation grounds.
   
This follows a spike in the share price last Friday on the back of vague talk over a possible merger with peer Bradford & Bingley.
   
Other banks were also under the cosh in cautious trade ahead of a busy week for reporting with Barclays and Lloyds TSB all publishing results.
   
HSBC and Barclays were also hit by a report they are weighing up possible bids for Bank of Alexandria, one of Egypt's most prominent banks.
   
Lloyds fell 5-3/4 to 541, Barclays was down 5-1/2 at 647-1/2 and HBOS was off 8-1/2 at 1020-1/2.
  
On the second line, Burren Energy was the top performer after UBS lifted its rating on the oil explorer to 'neutral' from 'reduce' on valuation. Its shares took on 22 to 962.
   
London Stock Exchange also gained as Citigroup upgraded the bourse operator to 'buy' from 'hold' citing its 'highly positive' defence of Macquarie's approach.
   
Sentiment in the stock was also lifted by a report in the Sunday Times that Macquarie is set to meet with institutional investors early this week before tabling an increased offer worth more than 700 pence a share.

 
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 Friday's close of trade, click here

Want to know what the smart money is buying? Get a little foresight every fortnight. Our team of stock market analysts produce four Technical Analysis reports every two weeks, featuring some of the hottest FTSE stocks. Using their expertise they identify significant movements in share prices – and we pass their expert insights on to you! Click here for your Free Reports.

Frankfurt

FRANKFURT - Market data at 08.35

   
Major indices:
   
DAX 30 - 5,770.02, down 25.46 points or 0.44 pct
MDAX - 8,215.79, down 13.85 points or 0.17 pct
TecDAX - 715.01, up 3.47 points or 0.49 pct
DAX future - 5,781.50, down 32.50 points or 0.56 pct

   
Major gainers:
   
Hypo Real Estate, up 1.01 eur or 1.77 pct at 58.01
   
Schering, up 0.58 eur or 1.03 pct at 57.13, as news the pharmaceutical company has decided to buy back shares for up to 500 mln eur between March 1 and Sept 30 offset fourth-quarter results that market participants said were uninspiring
   
Linde, up 0.62 eur or 0.95 pct at 65.85, following a newspaper report stating that British industrial gases giant BOC Group PLC will this week announce an agreed 1,600 pence per share takeover by the German conglomerate    

Altana, up 0.17 eur or 0.37 pct at 45.82
   
Continental, up 0.25 eur or 0.30 pct at 83.40   
   
   
Major losers:
   
Munich Re, down 1.53 eur or 1.32 pct at 114.23
   
Bayer, down 0.31 eur or 0.89 pct at 34.62
   
BMW, down 0.35 eur or 0.88 pct at 39.25
   
Allianz, down 1.10 eur or 0.82 pct at 133.20
   
Siemens, down 0.62 eur or 0.81 pct at 76.18

Amsterdam

AMSTERDAM - Market data at 09.25 GMT

   
Major indices
   
AEX                464.13, up 0.53 point
   
AMX Midcap         593.52, up 0.61 point
   
Government bonds   mainly higher

   
Major gainers
   
Van der Moolen rose 5.12 pct to 8.83 after reports said the company is on
the market for 300-400 mln eur.
   
SBM Offshore put on 2.01 pct to 83.90 and Royal Dutch Shell advanced 0.61
pct to 26.38.
   
Laurus added 1.47 pct at 3.44.
   
ASMI rose 1.39 pct to 16.0 ahead of fourth quarter results expected
tomorrow.
   
Vedior lifted 1.60 pct to 16.47 and Randstad went 1.04 pct higher to 49.49
after CSFB lifted its target price for the share to 54 eur from 45, while
reiterating its 'outperform' rating.
   
TNT went up 0.86 pct to 28.28 after the company said it intends to delist
from the London and Frankfurt stock exchanges due to cost concerns.
   
Akzo Nobel added 0.53 pct to 43.53 after announcing its Organon unit, along
with STW Technology Foundation and Radboud University Nijmegen, have begun a joint project to study the process of bone, fat and cartilage formation.

   
Major losers   

Hunter Douglas fell 1.25 pct to 51.50.
   
Corus shed 0.97 pct to 1.02.
   
VNU went 0.73 pct lower to 27.02.
   
Ahold slid 0.58 pct to 6.80.
   
Getronics lost 0.62 pct to 11.19 after the company lost an estimated 80-90
mln eur service contract with Philips, Rabo Securities said. The contract had
been under heavy pressure for some time, the broker said.
   
VastNed Retail was off 0.88 pct to 56.50 and Corio lost 0.29 pct to 51.95
after the company said that the opening of the Naples shopping centre has been
delayed due to legal claims filed against the real estate entrepreneur.

Move to Squaregain and enjoy fast, efficient dealing with connections to 13 online market makers. Deal in shares, covered warrants, funds, gilts and corporate bonds. All transactions a flat £12.50.
Click here for more information.

Forex

The Times Are A-Exchanging!

Now you can enjoy all the thrills and spills of the FTSE without having to take on the Bulls and the Bears or having to wear a ridiculous colour shirt! Paddy Power offer live betting on the movements of the FTSE, DAX, CAC 40 and the ISEQ.
Sell, Sell, Sell the old shirt and Buy, Buy, Buy a new one! Bet Now.

Comments

We welcome any suggestions or comments you may have concerning our bulletin, so please do contact us via comment@advfn.com.

ADVFN Services