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 25-08-2006
08/25/2006
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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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London |
London shares up in early deals; M&A talk boosts Lloyds TSB; miners gain
Leading shares traded higher in early deals, with Lloyds TSB among the top gainers on the back of M&A speculation and with mining issues offering support following a fresh rise in commodity prices, dealers said. At 8.53 am, the FTSE 100 traded 19.5 points to the better at 5,888.6, while the broader indices also managed moderate gains. Volume was relatively light, with 120.7 mln shares changing hands in 19,217 deals. Overnight on Wall Street, a choppy session saw the DJIA close 6.60 points firmer at 11,304.50, while the Nasdaq Composite index ended 2.45 points to the good at 2,137.11 and the S&P 500 index was 3.05 points higher at 1,296.05 at the close. US sentiment was curtailed by sluggish housing numbers and a disappointing durable goods report, while investors will today be looking towards Federal Reserve chairman Ben Bernanke's speech at the annual Fed symposium for global central bankers. And this morning in Asia, the Nikkei 225 index at midday was 146.82 points stronger at 16,107.44, while Hong Kong's Hang Seng ended its morning session up 71.18 points at 16,954.22, as investors bought back into Asian stocks following the previous day's weakness, spurred on by much lower-than-expected Japanese inflation numbers.
Japan's consumer price index rose 0.2 pct year-on-year in July versus market expectations for a 0.5 pct rise. In London today, amid light newsflow, mining issues offered support as commodity prices headed north again after yesterday's weakness, with gold prices breaching the 630 usd per ounce level and copper and silver prices also on the rise. BHP Billiton added 14 pence at 1,003, Rio Tinto climbed up 44 pence at 2,684 and Kazakhmys was 17 pence firmer at 1,221. The latter was also boosted by UBS initiating coverage of the miner with a 'buy' recommendation and 1,450 pence price target. The Swiss-owned broker noted that the group started 2006 with 830 mln usd of net cash and said it believes it will generate a total of 3.8 bln usd of free cash flow by the end of 2008.
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It went on to say it hopes the group will use some of the cash to exercise its option to purchase the 25 pct stake in ENRC Kazakhstan from Kazakhmys chairman Vladimir Kim and believes that full ownership of ENRC could transform the company. Oil majors also managed marginal gains as oil prices edged higher in Asian trading hours, with New York's main contract for light sweet crude for October delivery up half a dollar at 72.89 usd per barrel. Traders bought back into the energy markets after a big decline brought on by an unexpected increase in US gasoline and crude oil stockpiles. This fuelled a 12 pence rise in Royal Dutch Shell shares to 1,947, while BP took on 1-1/2 pence at 609. Elsewhere, Lloyds TSB Group was also in demand, up 7 pence at 530, amid takeover speculation after Bank of America CEO Kenneth Lewis told CNBC that if it makes another acquisition, it will be a "transformational deal". Lloyds' share price rise was compounded by Dresdner Kleinwort this morning telling clients that the bank's forte is its ability to manage costs. The German-owned broker added that it forecasts zero cost growth for Lloyds in 2006, but it still stuck to its 'reduce' rating on the stock. Meanwhile, the broker's reiteration of 'buy' ratings on several other banks bolstered individual performances, with Royal Bank of Scotland adding 15 pence at 1,780, HBOS 8 stronger at 1,007-1/2, HSBC rising 3-1/2 pence at 946, and Northern Rock 7-1/2 pence to the better at 1,108. Still on the M&A front, Vodafone enjoyed a positive start to trade, climbing up a penny at 111-3/4 after announcing it has agreed to sell its 25 pct stake in mobile unit Proximus to telecoms group Belgacom for 2 bln eur. Deutsche Bank subsequently reiterated its 'buy' advice on the telco, saying it views the deal as positive for Vodafone and it underscores again that other industry participants are willing to ascribe more value to Vodafone's assets than the financial markets assume. And investors also came for SABMiller, 5 pence to the good at 1,011-1/2, after the brewer said its Colombian subsidiary Bavaria will invest 175 mln usd in a new brewery in Yumbo, on the outskirts of Cali in western Colombia, to keep pace with growing demand in the region. The new brewery, which will become operational in late 2007, will have an initial capacity of 3.5 mln hectolitres, increasing to 4.5 mln by 2009.
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On the downside, Rexam was the main casualty, 5 pence lower at 544-1/2, hit by a Citigroup downgrade to 'hold' from 'buy' on valuation grounds after the global consumer packaging group and beverage can maker's shares surged yesterday on the back of its in-line interim results. Looking at results released today, second-liner Henderson Group was the top midcap riser, 4-3/4 stronger at 87-1/4 after the Anglo-Australian asset manager posted stronger-than-expected first-half results and promised a further capital return next year. In an initial reaction, Bridgewell Securities said Henderson had reported an 'impressive set of first-half figures, with profits strongly ahead'. The broker also highlighted the promise of further capital return next year in addition to the 200 mln stg to be returned to shareholders in October. Also among mid-caps gainers, Rank Group took on 2 pence at 211-1/4 after its subsidiary Grosvenor Casinos agreed to sell Clermont Club, an upmarket London casino, to BIL International's BIL Gaming Operations UK unit for 31 mln stg in cash. Elsewhere, on the economic data front today, investors will be eyeing the first revision of the UK's second quarter GDP, with the market looking for the figures to hold steady at 0.8 pct quarter-on-quarter growth and 2.6 pct year-on-year growth. Later in the morning, data is due on the services sector's output in June and also the UK BBA July mortgage lending final release is also on the agenda.
UK Diary of Events
For a list of key financial and corporate events in the UK today, click here
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Amsterdam |
AMSTERDAM - Market data at 10.12 am:
Major indices AEX 466.03, up 2.29 point AMX Midcap 578.95, up 3.02 points Government bonds unchanged to slightly higher Major gainers: ABN Amro rose 2.06 pct to 21.76 buoyed by news of a possible merger between Banca Intesa and Sanpaolo IMI, which could trigger further consolidation in the Italian banking sector amid investor hopes the Dutch bank could bid for Capitalia Getronics added 1.69 pct to 5.41 Eurocommercial Properties firmed 3.09 pct to 33.40 after reporting a 14 pct rise in its full-year direct investment result and raising its dividend BAM put on 1.64 pct to 15.50 after saying it won a 75 mln eur road construction order in Ireland Laurus climbed 4.08 pct to 2.40 on news last night the retailer reached an agreement-in-principle to sell 43 Edah supermarket franchises and four Super de Boer supermarket franchises for a total of 28 mln eur Major decliners: TNT slipped 1.01 pct to 28.45 Wolters Kluwer was off 0.94 pct at 19.06, Reed Elsevier gave up 0.24 pct to 12.38
Milan
MILAN - Market data at 9.45 am: Major indices
Mibtel 28,882 points, up 0.41 pct S&P/Mib 37,830 points, up 0.42 pct
Main S&P/Mib gainers: Sanpaolo gained 5.09 pct to 16.35 eur after announcing plans to merge with Banca Intesa. The merger, which is expected to be approved by the banks' boards tomorrow, could generate estimated synergies of 1.2 bln eur. Banca Intesa jumped 3.68 pct to 5.21. Fastweb added 2.72 pct to 30.18 after being upgraded to 'hold' from 'sell' by Citigroup. Capitalia added 2.40 pct to 6.925. There is speculation that the bank could merge with BMPS, or be taken over by Unicredito or a foreign bank. BMPS rose 2.21 pct to 4.76. Mediobanca was up 2.15 pct at 17.43. Main S&P/Mib losers: AEM fell 0.93 pct to 2.015
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Paris |
PARIS - Market data at 9.54 am:
Major indices: CAC-40 up 18.41 points or 0.36 pct at 5,131.26 SBF-80 up 33.05 points or 0.58 pct at 5,705.02 SBF-120 up 15.81 points or 0.43 pct at 3,707.70
Volume: 260 mln eur 22 CAC-40 stocks up 16 CAC-40 stocks down 1 CAC-40 stock unchanged (CAC-40 index has 39 stocks pending replacement for Arcelor)
Major gainers: Safran, up 1.30 eur or 8.92 pct at 15.88, amid talk it may sell assets after a management change prompted by the resignation of executive board member Gregoire Olivier Vallourec, up 3.80 eur or 2.19 pct at 177.00, building on yesterday's gains after Merrill Lynch started coverage with a 'buy' rating Natexis Banques Populaires, up 4.00 eur or 2.02 pct at 202.50 Vivendi, up 0.30 eur or 1.12 pct at 27.10, after Belgacom said it will sell its 5.8 pct stake in Neuf Cegetel to Vivendi's SFR for 187 mln eur
Major losers: STMicroelectronics, down 0.08 eur or 0.64 pct at 12.40 Sanofi-Aventis, down 0.40 eur or 0.57 pct at 69.60, pending a US court decision on its bid to block sales of a generic competitor to its blockbuster drug Plavix. Lagardere, down 0.25 eur or 0.44 pct at 56.60
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Frankfurt |
FRANKFURT - Market data at 10.09 am
Major indices: DAX 30 - 5,822.50, up 8.42 points or 0.14 pct MDAX - 8,055.94, up 24.70 points or 0.31 pct TecDAX - 647.24, up 0.58 point or 0.09 pct DAX future - 5,832.00, up 2.00 points or 0.03 pct
Major gainers: Commerzbank, up 1.15 eur or 4.40 pct at 27.30, on fresh takeover speculation, after Landesbank Rheinland-Pfalz argued that a potential merger between Italy's Banca Intesa and Sanpaolo IMI would put consolidation pressure on the German banks and branded Commerzbank a "permanent takeover candidate" Hypo Real Estate, up 1.13 eur or 2.43 pct at 47.58 Continental AG, up 1.37 eur or 1.71 pct at 81.50 BASF, up 0.70 eur or 1.11 pct at 64.04 ThyssenKrupp, up 0.27 eur or 1.05 pct at 25.96
Major fallers: Fresenius Medical Care, down 0.75 eur or 0.73 pct at 102.66 Siemens, down 0.39 eur or 0.59 pct at 65.44 Deutsche Telekom, down 0.06 eur or 0.52 pct at 11.56 DaimlerChrysler, down 0.20 eur or 0.49 pct at 40.75 Volkswagen, down 0.32 eur or 0.49 pct at 62.51
Forex
Singapore 0715 GMT |
Tokyo 0345 GMT |
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US dollar |
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yen 117.15 |
up from |
116.64 |
sfr 1.2394 |
up from |
1.2375 |
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Euro |
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usd 1.2763 |
down from |
1.2774 |
stg 0.6771 |
up from |
0.6766 |
yen 149.47 |
up from |
148.99 |
sfr 1.5806 |
down from |
1.5808 |
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Sterling |
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usd 1.8846 |
down from |
1.8880 |
yen 220.73 |
up from |
220.22 |
sfr 2.3351 |
down from |
2.3364 |
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Australian dollar |
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usd 0.7586 |
down from |
0.7607 |
stg 0.4023 |
down from |
0.4029 |
yen 88.950 |
up from |
88.728 |
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