UK/Euro Financial Market Daily Morning Briefing 20-11-2006

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London shares open lower; ITV takeover fears offset renewed mining M&A fever

Leading shares opened lower as renewed consolidation hopes in mining heavyweights were offset by growing uncertainty over the future of ITV after rival BSkyB bought a near 18 pct stake in the broadcaster late Friday, dealers said.
   
At 8.26 am, the FTSE 100 was off 29.75 points at 6,162.5, mirroring the weaker wider market.
   
ITV was the top casualty, down 4-1/4 pence at 111-1/2 as investors fretted over news late Friday that BSkyB took a 17.9 pct stake in the troubled broadcaster -- raising fears the move could scupper hopes of a 5 bln stg takeover by NTL.
   
In response, Credit Suisse cut its rating on ITV to 'neutral' from 'outperform' with a reduced target of 120 pence.
   
The broker said although NTL will probably fight BSkyB over the stake-building it makes a bid for ITV now less likely.
   
At the same time, BSkyB fell 10-1/2 at 526-1/2, with Deutsche Bank lowering its recommendation on the satellite broadcaster to 'hold' from 'buy'.

The broker told clients the move may signal lower conviction in Sky's view of its competitive position.

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In contrast, miners rallied on sector consolidation hopes after US peer Freeport-McMoRan Copper announced it will buy Phelps Dodge for 25.9 bln usd in cash and stock to create the world's largest publicly traded copper company.
   
In response, Antofagasta took on 12-1/2 at 417-1/4, Kazakhmys was 16 firmer at 1152, Lonmin added 33 at 2963, Anglo American gained 18 at 2416 and Rio Tinto rose 25 at 2694.
   
Meanwhile, Wall Street recovered from initial losses on Friday as a slump in oil prices offset key data revealing housing construction fell to its lowest level in more than six years.
   
The DJIA closed 36.74 firmer at 12,342.56 -- a new trading high, with The S&P up 1.44 to 1,401.20, the first time it has closed above 1,400 in more than six years, while The Nasdaq was down 3.20 at 2,445.86.
   
Over in Asia, the mood was more downbeat with the Nikkei 225 closing down 365.76 points at 15,725.94 while the Hang Seng was 133.89 lower at 19,048.82 by midday.

UK Diary of Events

For a diary of key corporate and financial events in the UK today, click here

US Summary

For a summary of US stocks at Friday's close of trade, click here

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PARIS  - Market data at 10.07 am:

Major indices:
   
CAC-40 down 36.82 points or 0.68 pct at 5,402.89
SBF-80 down 31.43 points or 0.48 pct at 6,472.52
SBF-120 down 24.98 points or 0.63 pct at 3,939.85

Volume: 487 mln eur
37 CAC-40 stocks down
3 CAC-40 stocks up

Major losers:
   
Bouygues, down 0.92 eur or 2.00 pct at 45.09 eur
   
Alstom, down 1.40 eur or 1.68 pct at 82.00 eur
   
Lagardere, down 0.85 eur or 1.50 pct at 55.65, following 865 mln eur takeover of TV and marketing rights company Sportfive.
   
Mittal, down 0.42 eur or 1.33 pct at 31.18 as the company confirmed it will complete planned squeeze-out of Arcelor shares, having not achieved 95 pct ownership of Arcelor shares by Friday's deadline.

Major gainers:
   
Schneider Electric, up 0.75 eur or 0.92 pct at 82.60
   
Veolia Environnement, up 0.30 eur or 0.60 pct at 50.50 following a report in daily Les Echos that Lafarge is to award the company a major contract.
   
Sanofi-Aventis, up 0.10 eur or 0.15 pct at 66.20.

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AMSTERDAM - Market data at 9.51 am

Major indices

AEX                  488.38, down 4.24 points
AMX Midcap           632.72, down 8.75 points
Government bonds     mainly higher

Major losers:
   
BAM dropped 13.07 pct to 14.17 after its cut its full year net profit forecast to 130 mln eur from 180 mln on sharper-than-expected losses at its German division Wayss & Freytag Schlusselfertigbau, prompting a flurry of recommendation and price target reviews by analysts, pending a conference call at 11.0 am.
   
Van der Moolen dipped 4.37 pct lower to 4.16.
   
Hagemeyer weakened 3.05 pct to 3.81.
   
ASMI fell 2.40 pct to 15.88 and Getronics fell 1.0 pct to 5.93.
  
TomTom shed 1.46 pct to 35.70.
   
Unilever went 1.32 pct lower to 20.23.
   
ING slid 1.21 pct to 33.49.
   
DSM edged 0.32 pct lower to 36.89, with the acquisition of a 10 pct stake in advanced materials company Micromuscle unable to buoy the share from the general negative market sentiment.
   
Rodamco Europe was off 0.27 pct to 92.15 amid company selling retail units in The Netherlands for around 41 mln eur.

Major gainers:
   
Corus added 0.41 pct at 7.34 following reports CSN held weekend talks with Corus over a proposed takeover which took Tata Steel off guard.
   
VastNed Retail lifted 0.58 pct to 69.45.
   
Imtech was flat at 44.65 after the company won a 20 mln eur North Sea order.

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FRANKFURT -  Market data at 9.32 am

Major indices:
   
DAX - down 22.91 points or 0.36 pct at 6,389.45
MDAX - down 82.98 points or 0.93 pct at 8,798.94
TecDAX - down 6.96 points or 0.99 pct at 695.19
DAX future - down 44.0 points or 0.68 pct at 6,391.5  

Major losers:
   
Deutsche Lufthansa, down 0.22 eur or 1.15 pct at 18.88
   
Siemens, down 0.75 eur or 0.99 pct at 75.00. Press reports say a massive slush fund fraud robbed Siemens of some 100 mln eur, five times the original estimate.
   
SAP, down 1.41 eur or 0.88 pct at 159.67
   
DaimlerChrysler, down 0.41 eur 0.87 pct at 46.74. Company officials say a restructuring plan for Chrysler will be unveiled in the first quarter of 2007.
   
Munich Re, down 1.02 eur or 0.82 pct at 123.33

Major gainers: 
   
Deutsche Telekom, up 0.11 eur or 0.80 pct at 13.88. The company is in talks to merge its T-Systems unit with Atos Origin, Cap Gemini or EDS, according to Financial Times Deutschland.
   
Deutsche Boerse, up 0.80 eur or 0.65 pct at 123.70
   
Adidas, up 0.22 eur or 0.59 pct at 37.55
   
E ON, up 0.35 eur or 0.36 pct at 96.66
   
Hypo Real Estate, up 0.02 eur or 0.04 pct at 46.21

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