UK/Euro Financial Market Daily Morning Briefing 22-08-2006

You do the driving - we'll do the rest! Click Here.

London shares higher as miners, oil stocks lend support

Leading shares were higher in opening deals as continued strength in mining and oil heavyweights and record results from housebuilder Persimmon offset a weak showing on Wall Street, dealers said.
   
At 9.00 am, the FTSE 100 was 9.8 points firmer at 5,925.0 with the broader indices all positive.
   
Meanwhile, US stocks closed lower, ending a five-day rally, as rising oil prices and disappointing results from Lowe's raised concerns about a slowdown in consumer spending.
   
The Dow Jones Industrial Average dropped 36.42 points to 11,345.05, the Nasdaq fell 16.20 to 2,147.75 and the S&P 500 lost 4.78 to 1,297.52.
   
But sentiment was better in Asia overnight, as the Nikkei 225 began its afternoon session 109.61 higher at 16,078.65, while the Hang Seng was up 71.59 at 17,079.47 by midday.
   
Still in Asia, oil prices firmed further as Iran vowed to press on with its controversial nuclear programme, paving the way for a possible showdown with the United Nations.
   
Earlier this morning, New York's main contract, light sweet crude for September delivery was 4 cents higher at 72.49 usd a barrel from its close of 72.45 usd in US trades overnight.
   
The news provided continued support for BP, up 1 at 620, Royal Dutch Shell gained 2 at 1,969 and Cairn Energy, 26 to the good at 2,098.
   
BG was also firmer, up 1-1/2 at 706, shrugging off news the group was  initiated a 'sell' at SG Securities.   
   
And mining stocks also lent support as gold prices surged on the back of a weak dollar and firm oil prices and as copper held steady after 3 pct gains yesterday on ongoing strike action in Chile.

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.

M&A talk also helped sentiment in the sector, with Antofagasta 5-1/4 higher at 441, Rio Tinto rose 30 at 2,786, Kazakhmys firmed 11 at 1,243, Vedanta was up 14 at 1,393 and BHP rose 7 at 1,057.
   
In earnings, Persimmon took on 14 at 1,290 after the housebuilder reported record interim pretax profits as it confirmed its integration of Westbury had completed ahead of schedule.
   
The group said pretax profits for the first half were up 16 pct to 271.5 with a raised dividend of 64.4 pence.
   
In response, Merrill Lynch reiterated its 'buy' advice and said the numbers beat its expectations.
   
In a note to clients, the broker added the stock was its top pick in the sector and the numbers will be seen as reassuring to the other UK housing stocks.
   
In response, mid-cap peers Wilson Bowden rose 26 at 1,710, George Wimpey firmed 6-1/4 at 490 and Bellway gained 14 at 1,249, further lifted by talk of predatory interest.
   
On the downside, Intercontinental Hotels was a major blue chip casualty as the group's robust interim results gave investors an excuse to take profits after recent strength.
   
The hotels group reported continuing operating profit of 107 mln stg for the six months to June 30, up from 82 mln stg last time and ahead of analysts' expectations of 96-104 mln.
   
In reaction, Merrill Lynch reiterated its 'buy' recommendation and 1,030 pence target, noting that the group made strong progress over the half with  both EBIT and pretax profits coming in ahead of its forecasts. Shares dipped 16-1/2 to 887 1/2.
   
On the second-line, Taylor Nelson Sofres added 7 at 182-1/4, lifted by vague M&A talk and positive broker comment.

Open a Selftrade Dealing account, pay a flat £12.50 for all transactions.
UK and international equities, funds, bonds, covered warrants and Listed CFDs. Instant account funding via debit card. No account or inactivity fees. Click here for more information.

Furthermore, the Financial Times reported there was vague talk WPP could be interested in bidding for the group. 
   
And bid news excited Matalan, up 4-1/4 at 176-1/2 after the retailer confirmed founder, executive chairman and 53 pct shareholder, John Hargreaves, is working on a possible offer of 200 pence a share.
   
Elsewhere, JKX Oil & Gas took on 5-1/2 at 162-14 after the explorer announced a one-year gas sales agreement with Royal Dutch Shell in Ukraine. In response, KBC Peel Hunt upgraded its recommendation to 'buy' from 'hold'. This morning, ABN Amro initiated the market research group a 'buy' with a price target of 210 pence per share.
   
The broker believes TNS' recovery potential has been underestimated, adding its valuation looks attractive in a sector where continued consolidation should sustain high ratings.
   
While peer Tullow Oil firmed 5-3/4 at 393-1/2 on the back of a positive drilling report from Uganda.
   
Meanwhile, broker comment lifted BBA, 5-1/2 to the good at 282, as Cazenove raised its rating on the stock to 'in line' from 'underperform'.
   
The broker said it expects the stock to perform in line with the market as funds position themselves for the demerger of Fiberweb.
   
In contrast, Bodycote International fell to profit taking, off 13-1/2 at 235, after in-line results from the engineer.
   
In response, Numis cut its rating to 'hold' from 'buy' on valuation following a strong run in the share price ahead of the numbers.

UK Diary of Events

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

US Summary

For a summary of US stocks at the close of trade, click here

The Goldline trading system makes profitable trading now accessible to all! With Goldline you make no decisions - you make no mistakes. Click Here

AMSTERDAM - Market data at 10.06 am:

Major indices
   
AEX                464.0, up 1.04 point
AMX Midcap         582.08, up 2.38 points
Government bonds   unchanged to slightly higher
 
Major gainers:
   
Hunter Douglas jumped 3.65 pct to 54.0 after the window coverings maker reported sharp growth in second-quarter net profit and reiterated that it "remains optimistic" about the outlook for operations for the rest of the year
   
LogicaCMG, up 2.11 pct at 2.42, recovered some of yesterday's sharp losses after it announced plans to buy Nordic rival WM-Data for 882 mln stg in cash and shares, a move viewed as expensive by analysts
   
Akzo Nobel led blue chip gainers, up 0.69 pct at 43.90   

ASML firmed 0.61 pct at 16.44, Philips rose 0.53 pct at 26.36
   
Fortis benefitted from an upgrade to 'neutral' from 'sell' by Goldman Sachs, climbing 0.37 pct at 30.21 while Aegon put on 0.36 pct at13.80

Major losers:
   
Ordina plunged 10.72 pct at 15.74 after the IT services company reported "disappointing" first-half results which saw an unexpected drop in net profit.

Petercam downgraded its rating to 'reduce' from 'add'
   
Van Lanschot, listed on the local market, tumbled 8.7 pct to 72.40 eur after the Dutch investment bank announced first-half profits below analysts' expectations and warned it will be "difficult" to meet its target of 10 pct full year EPS growth
   
Getronics eased 0.57 pct at 5.26, Wolters KLuwer slipped 0.11 pct at 18.90, the only blue chip decliners    

TheWrongPrice.com can help you make informed investment decisions, advising you when best  to buy and sell shares to maximise the return on investment.

Since its inception in 2000, TheWrongprice.com team has consistently proven their ability to identify smart investment opportunities. Our recommendations have outperformed FTSE100 by a record 78.1%. Click here for a special subscription offer. 

PARIS - Market data at 10.14 am:

Major indices:
   
CAC-40 up 15.64 points or 0.31 pct at 5,120.29
SBF-80 up 15.96 points or 0.28 pct at 5,668.81
SBF-120 up 11.97 points or 0.32 pct at 3,696.61

Volume: 443 mln eur
32 CAC-40 stocks up
6 CAC-40 stocks down
1 CAC-40 stock unchanged
(CAC-40 has 39 stocks pending a replacement for Arcelor)

Major gainers:
   
Imerys, up 1.50 eur or 2.56 pct at 60.20, after the daily La Tribune said it wasn't among companies mulling bids for Lafarge's roofing materials business. The paper said some people expected Imerys to bid.
   
Alstom, up 1.60 eur or 2.31 pct at 71.00, after winning a 560 mln eur power plant order from US utility Kansas City Power & Light.
   
Technip, up 0.62 eur or 1.42 pct at 44.38, outperforming other oil stocks as crude oil prices remained high.
   
Lafarge, up 1.10 eur or 1.10 pct at 101.30, as the La Tribune report said at least 13 companies were interested in its roofing materials business.
   
Major losers:
   
EADS, down 0.33 euro or 1.45 pct at 22.44, after being downgraded to 'sell' from 'add' by ABN Amro.
   
Axa, down 0.29 eur or 1.01 pct at 28.40 after being downgraded to 'outperform' from 'selected list' by CA Cheuvreux
   
Electricite de France, down 0.10 eur or 0.22 pct at 45.10. The daily Les Echos said it plans to spend around 3 bln eur to replace 27 mln French electricity meters.

Premium Bonds are an investment that offers the chance of a big tax-free win, with monthly prizes ranging from £50 through to two £1 million jackpots. Anyone aged 16 or over can purchase them, with purchase values ranging from the £100 minimum through to a £30,000 maximum. Click Here

FRANKFURT - Market data at 10.26 am

Major indices:
   
DAX 30 - 5,822.09, up 27.26 points or 0.47 pct
MDAX - 8,084.92, up 6.29 points or 0.08 pct
TecDAX - 654.83, up 1.37 points or 0.21 pct
DAX future - 5,835.50, up 21.50 points or 0.37 pct

Major gainers:
   
TUI, up 0.28 eur or 1.90 pct at 14.98, after Handelsblatt reported that the tourism and shopping giant is considering dismissing management board members Sebastian Ebel and Eric Derby in response to its disappointing second quarter results
   
Commerzbank, up 0.42 eur or 1.65 pct at 25.90
   
Infineon, up 0.13 eur or 1.50 pct at 8.81
   
ThyssenKrupp, up 0.27 eur or 1.02 pct at 26.67, as Die Welt reported, citing company sources, that the steel conglomerate hopes to sell its US automotive operations ThyssenKrupp Budd Co in the next few months and is in talks with several "industrial partners" over the business
   
SAP, up 1.46 eur or 1.00 pct at 146.84

Major losers:
   
Volkswagen, down 0.40 eur or 0.63 pct at 63.04
   
Continental AG, down 0.28 eur or 0.35 pct at 80.01
   
Allianz, down 0.30 eur or 0.23 pct at 130.94, as CA Cheuvreux downgraded its stance on the issue to 'outperform' from 'selected list' with an unchanged price target of 155 eur
   
RWE, down 0.14 eur or 0.19 pct at 71.91
   
Hypo Real Estate, down 0.04 eur or 0.09 pct at 46.17

Forex

ADVFN Services