UK/Euro Financial Market Daily Morning Briefing 21-12-2007

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This is the last Morning Euro Markets Bulletin to be sent by ADVFN until Wednesday 2nd January, when they will resume as normal.

London

London shares higher in early trade, after late Wall Street rally

At 9.10 am, the FTSE 100 was up 74 points at 6,419.6, having risen 61.1 points yesterday to close at 6,345.6. The FTSE 250 was up 105.2 points at 10,502.4. Volume was average, with 245.1 mln shares having traded in 64,939 deals.

US stocks finished higher on Thursday as investors set aside some concerns about downbeat economic reports and focused on strong profits from Oracle Corp. Corporate results and economic news offered investors a mixed picture and kept stocks fluctuating throughout much of the session.

The Dow Jones Industrial Average ended 38.37, or 0.29 pct, higher at 13,245.64. Broader stock indicators also gained. The Standard & Poor's 500 index advanced 7.12, 0.49 pct, to 1,460.12, and Oracle's results helped push the tech-heavy Nasdaq composite index up 39.85, or 1.53 pct, to 2,640.86.

The Dow and S&P had been in negative territory as the London markets closed yesterday. Asian stock markets also gained this morning. Japan's Nikkei 225 index closed up 225.4 points, or 1.5 pct, at 15,257.0. The Hang Seng Index closed up 609.83 points, or 2.3 pct at 27,626.92. But, as with the UK in recent days, Asian volume was thin ahead of the holidays.

Back in London, notable gainers in early trade included Vodafone, up 2.5 pence at 187.5, building on a rise yesterday when SFR, in which it has a 44 pct stake, confirmed reports it plans to buy the stakes it doesn't own in fixed line telecoms group Neuf Cegetel.

Likewise, Rolls-Royce was 15 pence higher at 525, leading the FTSE 100 leaderboard, having announced yesterday that it will pay 500 mln stg to cut its pension deficits, and that it had won an offshore marine contract.

Stronger gold and copper prices helped boost the mining sector. Antofagasta was up 22 at 705-1/2, while Kazakhmys was 37 stronger at 1,333. Anglo American was up 77 at 2,961. Banks continued their recovery, including Royal Bank of Scotland, up 7 at 436-3/4, and index heavyweight HSBC, up 9 at 851.

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Meantime, Brent North Sea crude for February delivery rose 12 cents to 91 usd a barrel in Asian trade after closing down 60 cents at 90.88 usd in London. This helped BP push 6 pence higher to 617-12. despite the Independent reporting that the company faces a 2 bln usd fine after a 2005 disaster that killed 15 people at a Texas refinery.

Among the few on the downside, Wolseley fell 1/2 penny to 719-1/2 pence after Deutsche Bank cut it to 'hold' from 'buy' with a reduced target of 763 pence. Friends Provident recovered from earlier falls to trade 1/2 penny higher at 155.4 pence after the Times reported that the company froze its 1.2 bln stg flagship fund after a rush for the exit by investors over the past three weeks.

The paper described the move as a deepening of the crisis in the commercial property investment market. Among the midcaps, Northern Foods rose 3-1/2 pence to 93-1/2 pence after Merrill Lynch upgraded it to 'buy' from 'neutral', with a 100 pence price target.

In a note this morning, the broker said it is restoring its previous estimates and upgrading following the group's announcement of a buy-back programme for up to 5 pct of its shares. Car dealership Pendragon surged 3 pence, or 9.8 pct, to 33-3/34, after announcing that it has made three further surplus property sales this month for a total consideration of 10 mln stg, realising a profit of 6 mln stg.

Pendragon shares have lost 75 pct since May, with the company having made a profit warning. LogicacMG rose 3 pence to 114-12 after Goldman Sachs upgraded to 'neutral' from 'sell', following the company's recent underperformance.

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The market may get some direction later from November retail sales figures, produced by the Office for National Statistics. Shares in retailers, such as PC World and Currys owner DSG International, have been some of the worst performers in the last year. DSG's slide means it drops out of the FTSE 100 after today, although it was up 1.6 at 104.2 this morning.

Among others dropping out the top flight today, as they are also perceived as potential victims of lower consumer confidence, are Barratt Developments and Punch Taverns.

Today's retail sales figures are expected to show a slight pick up in growth during November, driven partly by shops offering heavy discounts. The forecast is for sales to have grown 0.2 pct, after falling 0.1 pct in October, while the year-on-year rate is seen edging up to 4.5 pct from 4.4 pct. Other data due include the UK October services output, and the December Gfk/NOP consumer confidence reading.

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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Milan shares TFN market data at 9.40 am; Fastweb, Impregilo lead market higher

Main indices
Mibtel at 29,083, up 0.78 pct
S&P/Mib at 38,200, up 0.88 pct

Main S&P/Mib gainers:
Fastweb up 2.09 pct at 25.90 eur, rebounding from recent losses. Earlier, the broadband operator cut by 20 mln eur its full-year sales target to 1.430 bln and said it will reach break-even at the net level for the first time next year

Impregilo up 1.97 pct at 4.45
Fiat up 1.97 pct at 17.28

Alitalia up 1.66 pct at 0.79. The airline's board is scheduled to meet today to choose a partner for exclusive talks for a tie-up. Analysts said Air France-KLM is the front runner to buy the state's 49.9 pct stake in Alitalia BPM up 1.50 pct at 9.18

Main S&P/Mib losers:
Enel down 0.06 pct at 8.08

Other stocks in the news:

Eni up 0.85 pct at 24.87, amid reports saying the Kashagan consortium, of which Eni is the operator, and the Kazakh government have postponed to an indefinite date the settlement of their dispute over cost overruns and delays at the giant oil filed in the Caspian Sea.

The parties were scheduled to reach an agreement by yesterday. Dealers said a statement could be issued today In the meantime, Citigroup raised its price target on Eni shares to 29 eur from 28 eur and reiterated its 'buy' rating on the stock.

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German shares TFN market data at 10.08 am

DAX - up 118.59, or 1.51 pct, at 7,987.78
MDAX - up 138.99 points, or 1.44 pct, at 9,762.25
TecDAX - up 12.98 points, or 1.36 pct, at 967.61
DAX futures - up 96.50 points, or 1.22 pct, at 7,991.00

Major Gainers:
Deutsche Postbank, 1.39 eur or 2.38 pct at 59.91, as traders pointed to a media report Merrill Lynch may soon receive up to 5 bln usd in a capital injection which was boosting the banking sector.

Deutsche Boerse, up 2.85 eur or 2.21 pct at 131.77
Siemens, up 2.25 eur or 2.15 pct at 107.13

Hypo Real Estate, up 0.76 eur or 2.09 pct at 37.21, also benefiting from positive sentiment on the banking sector and as traders said the stock is also gaining momentum ahead of new index re-weightings to take effect on Dec 27.

Allianz, up 2.65 eur or 1.87 pct at 144.65, after it said sold number of German commercial properties to units of Whitehall Funds for some 1.7 bln eur

Other Shares in Focus:
MDAX-listed MTU Aero Engines, up 1.58 eur or 4.14 pct at 39.77, after UBS has upgraded its stance to 'buy' from 'neutral' saying shares in the airplane engine specialist trade at an unjustified discount to its aerospace and defence peers.

MDAX-listed MLP, up 0.367 eur or 3.58 pct at 10.71, fuelled by vague takeover speculation after a report in Financial Times Deutschland said that Deutsche Postbank AG was earlier this year considering buying MLP's financial services peer AWD Holdings AG.

MDAX-listed IVG Immobilien, down 0.47 eur or 2.09 pct at 22.00,  as traders pointed to a possible large-order seller clearing his books, and said the little news on the real estate specialist out today was actually slightly positive.

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Amsterdam shares TFN market data at 10.38 am - AEX broadly higher

MAJOR INDICES
AEX  511.59, up 4.80 points
AMX Midcap 644.88, up 4.33 points
Government bonds    higher

MAJOR GAINERS
Randstad rose 2.95 pct to 225.80 eur ArcelorMittal added 2.24 pct to 50.61 eur after news that the Argentinian market regulator cleared ArcelorMittal's buyout of Acindar minorities

Unibail-Rodamco added 1.25 pct to 146.20 eur after it announced the acquisition of part of a large shopping mall in Vienna, Austria KPN added 1.30 pct to 12.48 eur after yesterday's late news that it sold its Getronics Spain and Portugal units

Hagemeyer added 0.43 pct to 4.68 eur after Rexel said it will formally launch its takeover bid on Decr 24
Philips added 0.39 pct to 30.83 eur, underperforming the AEX as investors digested the 3.6 bln eur takeover price tag for Respironics

LogicaCMG added 2.58 pct to 1.59 eur after an upgrade to 'neutral' from 'sell' at Goldman Sachs Oce rose 0.91 pct to 12.16 eur after it said it sold its German Documents unit Boskalis added 0.27 pct to 40.61 eur after the Australian city Melbourne awarded the dredging group a 300 mln eur contract Local stock Spyker added 7.36 pct to 4.23 eur after it secured new financing from Lithuanian bank Snoras

MAJOR DECLINERS
Crucell dropped 0.09 pct to 11.24 eur as investors were unimpressed by news of new tuberculosis vaccine clinical trials starting in the US Van der Moolen dropped 0.72 pct to 2.76 eur

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