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 20-09-2006
09/20/2006
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ADVFN III |
Morning Euro Markets Bulletin |
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Daily world financial news from AFX/Associated Press |
Supplied by advfn.com | | |
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Astor Securities Investment Newsletter |
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London |
London shares open firmer; M&A talk offsets caution ahead of key data
Leading shares opened modestly firmer, recovering from yesterdays slide on Wall Street, and ahead of key economic data in the UK and across the Atlantic, with the much-awaited FOMC meeting later today, while M&A market talk offset a weak mining sector, dealers said. At 8.55 am, FTSE 100 was 5.5 points firmer at 5,837.2, while the FTSE 250 was also 5.1 points to the better at 9,743.8. Volume was modest, with 174.3 mln shares changing hands in 25,169 deals. Overnight, Wall Street slid on news of a military coup in Thailand, with most of the indexes recovering earlier losses but still closing down. The DJIA fell 14.09 points to 11,540.91, while the Nasdaq composite index fell 13.38 points to 2,222.37. The index was hurt by an 11 pct drop in Yahoo and what investors call "the flight to quality," a tendency to sell riskier tech stocks heavily during political crises. But caution seems to be the order of the day ahead of the FOMC meeting later today. The guarded mood spilled over into Asian markets, which also recouped most of their losses as investors took the view that the coup in Thailand should not cause any long-term damage to the regions growth prospects. The Nikkei index closed down 155.61 points at 15,718.67, while the Hang Seng closed the morning session up 11.96 points at 17,358.66. On the economic front in the UK, investors will eyeing the minutes of the Bank of Englands Monetary Policy Committee, due out at 9.30 am, while figures on August mortgage lending should also provide some focus. On the upside, Corus Group led the bluechip gainers, up 6-1/4 pence to 366 following an upgrade to 'overweight' from 'equal-weight' by Morgan Stanley on increased confidence that the company will strike a value-enhancing deal in the coming months. Morgan Stanley estimates value creation from a deal with a low cost producer and exporter of steel slabs from BRIC (Brazil, Russia, India and China) at some 250 mln stg, or 20 pence per share, and therefore lifted its target to 490 pence from 470 pence.
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Man Group was another main feature on the upside, up 4-1/4 pence to 430 after the group was tipped as a potential bid target for Goldman Sachs in The Guardian. Still among financial issues, new arrival asset management group Resolution firmed by 3 pence to 605 after posting interim profits slightly ahead of market expectations, helped by merger benefits. Resolution, the biggest of a new breed of insurer which specialises in buying and profitably managing life insurance funds that have been closed to new customers, reported operating profit of 115.9 mln stg for the six months to June 30. That was just above a 110 mln stg consensus analyst forecast collected by the company. British Airways rose 6 pence to 426-3/4, as crude oil prices attempted a comeback but remained tame after yesterday's slide of over 2 usd. Cruise operator Carnival rose 15 pence at 2,297. Crude oil traded 10 cents higher at 61.76 usd. Broker action lifted shares in Enterprise Inns, up 14 pence to 1,064 after Merrill Lync hiked its price objective to 20 pct above the current share price, citing the firm's accelerated disposal of the bottom end of its estate in August and the subsequent opportunities to return more cash to shareholders via share buybacks and dividends. Meanwhile, Pearson climbed by 4 pence to 735 after Credit Suisse upgraded to 'outperform' from 'neutral' in a publishing sector review, while lifting its price target of 860 pence from 700, as the most likely to see earnings upgrades together with and McGraw-Hill -- also rated 'outperform'. The broker expects growth and M&A activity is likely to increase to over 8 pct from 6 pct in the first half of 2006, suggesting its current forecasts for the second half of the year and 2007-2008, which are in line with the top end of the consensus range at about 5 pct, may prove conservative. However, Credit Suisse cut Reed Elsevier to 'neutral' in a publishing sector note, which sent the shares down by half a penny to 575-1/5. On the downside, PartyGaming slid by 2-1/2 pence to 100-1/2 after a downgrade to 'reduce' from 'neutral' by UBS, with a lowered target of 75 pence from 135. The broker said that after looking at the long-term prospects for online poker under the current regulations, it concludes that revenues are likely to "decline materially" in the future.
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Second line peer 888 Holdings fell 3-1/2 pence to 141-1/2 in sympathy. Back among the bluechips, the heavyweight mining sector was under the cosh as gold prices keep retreating, down 2.9 usd to 580/3 usd per ounce, while copper prices eased by 0.030 usd to 3.3450. Xstrata lost 47 pence to 2,104, Anglo American was 39 pence to the worse at 2,099, Kazakhmys shed 20 pence to 1,190, Rio Tinto slid by 30 pence to 2,379, Antofagasta was 6-1/4 pence weaker to 432, while Lonmin was 24 pence weaker at 2,567 and Vedanta Resources fell by 9 pence to 1,227. Elsewhere, UK utilities were in focus after JP Morgan revisited its forecasts for the sector and in doing so, downgraded its stance on British Energy Group to 'neutral' from 'overweight', with Centrica its top sector pick. JP Morgan said it moved its forecasts for the UK utilities to reflect an upgraded oil price view of 50 usd per barrel long term, and raised its long-term UK electricity price forecast to 41 stg per megawatt per hour (MWh). British Energy shed 9 pence at 573-1/2, while Centrica also fell by 1-3/4 to 315-3/4. Over on second tier, Woolworths clawed gains, up half a penny to 33-1/2 as the troubled variety store retailer recently linked with a possible break-up bid from Baugur, the acquisitive Icelandic group, reported a near doubling in underlying first-half losses but has seen the sales trend improve in its second half, "as expected". The group made an interim underlying pretax loss of 66.8 mln stg, compared to analysts' consensus forecast of a loss of 69.6 mln stg and a loss of 36.2 mln stg last time. Group sales from continuing operations fell 3.6 pct to 982.9 mln stg. As a result, Panmure Gordon reiterated its 'hold' stance on the stock, noting the Baugur speculation should provide some further upside, although it said it remains to be seen whether Baugur would lift their stake more aggressively.
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
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Paris |
PARIS - Market data at 9.50 am:
Major indices: CAC-40 up 10.59 points at 5,126.58 SBF-80 down 3.20 at 5,850.48 SBF-120 up 6.30 at 3,711.78
Volume: 436 mln eur 23 CAC-40 stocks up 15 CAC-40 stocks down 2 unchanged
Major gainers: Infogrames Entertainment, up 0.04 eur, or 12.1 pct, at 0.37 as volatile trading continues following last week's announcement of a 74 mln eur share capital increase, which cut the video game editor's market capitalisation by one-third. Alcatel, up 0.11 at 9.25 and recovering from recent weakness in line with broad rebound for TMT sectors. Sodexho Alliance, up 0.45 or 1.1 pct at 42.80 after an upgrade to 'outperform' from 'neutral' by Exane BNP Paribas, with an improved price target of 50 eur from 38 eur.
Major losers: EADS, down 0.35 or 1.5 pct at 22.37 after French daily Les Echos said a further 6-month delay could soon be announced for Airbus A380 superjumbo deliveries, bringing the cumulative setback for the programme to 18 months and raising the spectre of new penalty payments to customers. Aeroports de Paris, down 1.55 or 2.9 pct at 51.15 after the airport operator posted a pro forma first half net profit of 91.5 mln eur, below analyst estimates of about 95 mln. Pernod Ricard, down 1.0 or 0.6 pct at 168.60 ahead of tomorrow's release of first half results. Ipsos, down 0.09 or 0.3 pct at 29.40 and reversing gains seen after the market research group announced a plan to raise its operating margin to 12 pct by the end of 2011, up from the 8 pct margin posted for the first half of this year. Analysts welcomed the ambitious plan, but many said the stock was already fully valued.
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Frankfurt |
FRANKFURT - Market data at 10.09 am
Major indices: DAX 30 - 5,899.53, up 26.07 points or 0.44 pct MDAX - 8,210.40, up 2.21 points or 0.03 pct TecDAX - 650.23, down 0.56 points or 0.09 pct DAX future - 5,940.5, up 18.50 points or 0.31 pct
Major risers: Continental up 2.54 eur or 2.87 pct at 90.91, as speculation about a possible takeover of the company continued to arouse investor interest MAN, up 1.13 eur or 1.84 pct at 62.51, as speculation over a possible takeover of Scania continued to propel shares SAP up 2.56 eur or 1.69 pct at 153.79, after US rival Oracle Corp yesterday reported its first quarter net profit increased 29 pct. Deutsche Telekom, up 0.16 eur or 1.37 pct at 11.87 Munich RE up 1.39 or 1.16 pct to 120.84
Major decliners: Deutsche Boerse, down 0.86 eur or 0.73 pct at 117.25 Bayer, down 0.23 eur or 0.59 pct at 38.87 Altana, down 0.23 eur or 0.51 pct at 44.46 RWE, down 0.22 eur or 0.31 pct at 71.41 Fresenius Medical Care, down 0.21 eur or 0.21 pct at 100.33
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Amsterdam |
Amsterdam shares AFX at a glance outlook
Forthcoming Events Today Fortis extraordinary general meeting of shareholders Philips Lighting analyst day
Tomorrow Dutch June-August unemployment figures
Today's Press Ahold in talks with Delhaize on possible merger (Financieele Dagblad)
Company News DSM sells pharmaceutical factory to Albemarle for undisclosed sum Philips says Lighting division to achieve 6 pct long-term sales growth rate Ten Cate to sell its Landscape Solutions to Greenfields for undisclosed sum
Market Sentiment Corus upgraded to 'overweight' from 'equal-weight' at Morgan Stanley LogicaCMG trades ex-dividend
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