UK/Euro Financial Market Daily Morning Briefing 26-04-2006

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London shares open higher driven by gains in miners; Centrica bid hopes

UK blue chips pushed higher at the open, rebounding after yesterday's falls with miners firmer on fresh metals price rises and Centrica higher again on fresh Gazprom bid talk, helping offset an overnight decline on Wall Street, dealers said.
   
At 9.14 am, the FTSE 100 index was 24.54 points higher at 6,111.1, with all
the broader FTSE indices also firmer.

Early volume was solid, with 254 mln shares changing hands in 32,377 deals.
   
Overnight on Wall Street, US stocks closed lower as worries about the interest rate outlook, sparked by unexpectedly strong consumer confidence data overshadowed the impact of a drop in crude oil prices and solid earnings news from AT&T.
   
The DJIA shed 53.07 points to end at 11,283.25, while the Nasdaq Composite Index lost 3.08 points to close at 2,330.30.
   
After-hours in the US, however, Amazon.com saw good gains after the online retailer posted higher-than-expected quarterly sales.
   
And Asian markets were firmer today. The Nikkei 225 index ended 85.64 points higher at 17,055.93 on bargain-hunting, while the Hang Seng ended its morning session 62.89 points firmer at 16,640.66.
   
In London, Centrica was the top blue chip riser in early deals, adding 11-1/4 pence at 313-1/2 after the Financial Times reported that Prime Minister Tony Blair has reportedly ruled out attempting to block any potential takeover of the group by Gazprom of Russia.
   
The newspaper reported that Blair believes Britain must stick by its commitment to liberalise European markets.
   
Strength in the mining sector also helped drive early blue chips gains as metal prices bounced high again, with silver jumping 7 pct in value and copper hitting news highs.
   
Antofagasta was one of the strongest gainers, adding 49 pence at 2,499 helped by being the market's purest copper play. 
   
Meanwhile BHP Billiton shares took on 7-1/2 pence at 1,177 after the Anglo-Australian group revealed third quarter production news overnight.
   
The diversified miner revealed that group production in the March quarter was reduced by cyclones that hit its operations in Western Australia, and higher rainfall which reduced output in South Africa.
   
But the diversified miner said, despite these factors, record year to date production of nickel, copper, natural gas and aluminium was achieved over the nine months to March.

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Insurance issues were also in demand following better than expected Q1 new business numbers from Legal & General, up 2-3/4 pence to 144-1/4.
   
L&G said total new business sales for the first three months of 2006 came in at 390 mln stg on an annual premium equivalent basis.
   
This was up 27 pct on the same period last year, and ahead of the consensus analyst forecast of 337 mln stg.
   
Elsewhere in the sector, Prudential took on 3-1/2 pence at 650, while Aviva added 3 pence at 806, and Friends Provident gained 4-3/4 pence at 200.
   
And Reuters saw modest gains, up 0-3/4 pence to 399-1/3 after the UK financial news and data provider reported stronger-than-expected rise in first-quarter revenues and re-affirmed growth targets for 2006.
   
In response, Citigroup reiterated its 'buy' recommendation noting revenues came in some way ahead of its and consensus forecast, up 13 pct at 633 mln stg compared with the broker's flagged 610 mln.
   
On the downside with blue chips, British Energy was the biggest faller, down 19 pence at 696 amid reports of a bearish note on the carbon emissions trading market from UBS.
   
Fellow power generator Drax topped the FTSE 250 leaders board as well, down 21-1/2 pence to 784-1/2.
   
Among other blue chip fallers, BP shed another 3 pence at 698-1/2 as profit-taking continued following yesterday's Q1 trading update and with crude price slipping back again.
   
Oil prices were lower in Asian trade as the market responded to President Bush's decision yesterday to halt deliveries to the US strategic reserves for the time being.
   
New York's main contract, light sweet crude for delivery in June, was at 72.80 usd a barrel, down 0.08 usd from 72.88 usd in the US overnight.
   
And ex-dividend factors knocked Northern Rock and Cadbury Schweppes.

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On the second line, Isoft Group was the best performing, extending yesterday's strong gains with another 9-3/4 pence rise to 156-3/4 as rumours continued to circulate about a possible bid, with Misys mentioned as a possible predator. 
   
Elsewhere, Soco International was also a good mid cap riser, up 101 pence to 1,561-1/2 after the explorer said it has struck oil again with its latest test well on its offshore oil field in Vietnam.
   
Positive trading news was the spur to gains in First Choice, ahead 10 pence to 225, with Mytravel firmer in sympathy, up 4 pence to 224-1/2.
   
Meanwhile JD Wetherspoon added 9-1/4 pence to 392-1/4 following strong third quarter like-for-like sales figures, which prompted Bridgewell to upgrade its rating to 'neutral' from 'underweight'.
   
And broker upgrades helped drive Carphone Warehouse shares 9 pence higher to 331-1/2 with Credit Suisse upping its stance to 'outperform', and Tomkins, ahead 10-3/4 pence to 338-3/4 following a Citigroup upgrade to 'buy'.
   
On the downside with mid caps, ex-dividends dominated, with National Express, Carillion and Informa among those losing their pay-out attractions today.
   
On the macro front, all eyes domestically will be on the preliminary estimate for first quarter GDP.
   
Analysts expect the UK economy to have grown by 0.6 pct once again, which would take the annual rate up to 2.2 pct from the fourth quarter of 2005's equivalent of 1.8 pct.
   
In the US, after yesterday's stronger than expected consumer confidence numbers, today's data releases include March durable goods orders, March new home sales, and - after the London close -- the release of the latest Fed Beige Book.

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PARIS - Market data at 9.45 am:

Major indices:
   
CAC-40 up 10.58 points at 5,245.92
SBF-80 up 0.14 at 6,176.37
SBF-120 up 6.80 at 3,820.39

Volume: 466 mln eur
27 CAC-40 stocks up
13 CAC-40 stocks down

Major gainers:
   
JCDecaux, up 1.40 eur or 6.1 pct at 24.55 after raising its 2006 organic sales growth target to over 6 pct from 5 pct previously, citing improved French advertising trends and growth for its Transport activities.
   
STMicro, up 0.04 at 15.77 after posting first quarter results that slightly exceeded forecasts, but analysts said further upside was limited by cautious guidance for margin improvement in the second quarter.

Major losers:
  
Michelin, down 0.50 or 0.9 pct at 56.70 as profit-taking followed its release of first quarter sales, which surpassed forecasts with like-for-like growth of 10.2 pct. The stock closed at a 52-week high yesterday.
   
Casino, down 2.20 or 3.4 pct at 62.90, also hit by profit-taking after its first quarter sales beat forecasts, rising 3.8 pct like-for-like to 5.94 bln, as its core French businesses recovered. Heavyweight brokerage CA Cheuvreux cut its Casino rating after the report, as did rival French brokerage Exane BNP Paribas.

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FRANKFURT - Market data at 10.00 am
   
Major indices:
   
DAX 30 - 6,089.45, up 10.65 points or 0.18 pct
MDAX - 8,808.70, down 1.95 points or 0.02 pct
TecDAX - 741.53, up 2.63 points or 0.36 pct
DAX future - 6,113.50, up 7.50 points or 0.12 pct

Major gainers:
   
Commerzbank, up 0.71 eur or 2.24 pct at 32.41
   
Infineon, up 0.17 eur or 1.80 pct at 9.62, after the German chipmaker reported much better-than-expected second-quarter results, with both EBIT and sales surpassing analysts' forecasts, prompting Landesbank Rheinland-Pfalz to  upgrade its stance on the issue to 'outperformer' from 'marketperformer' and hike its price target to 11 eur from 9
   
Linde, up 0.96 eur or 1.38 pct at 70.42, ahead of its first-quarter results later today
   
Bayer, up 0.31 eur or 0.88 pct at 35.42
   
Siemens, up 0.65 eur or 0.83 pct at 78.61

Major losers:
   
RWE, down 0.69 eur or 0.95 pct at 71.68
   
ThyssenKrupp, down 0.20 eur or 0.72 pct at 27.43, pulling back after recent solid gains
   
E.ON, down 0.67 eur or 0.68 pct at 97.38
   
BASF, down 0.40 eur or 0.58 pct at 68.16
   
Metro, down 0.17 eur or 0.37 pct at 45.41

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AMSTERDAM  - Market data at 10.24 am

 Major indices:
   
AEX index             476.30, up 0.05 pct
AMX Midcap index      638.86, up 0.10 pct
Government bonds      mixed in a narrow range

Major losers:
   
ABN fell 3.06 pct to 24.10 eur after a generally weak set of first quarter figures, with higher-than-expected loan loss provisions a particular disappointment, dealers said.
   
Randstad fell 2.75 pct to 53.10 eur as the market reacted negatively to the company's weaker-than-expected outlook for the second quarter.

Major gainers:
   
Philips rose 1.11 pct to 27.32 pct and Getronics was up 0.72 pct to 9.75 eur amid positive sentiment towards the tech sector following solid first quarter results from Infineon and STMicroelectronics.
   
Crucell rose 1.40 pct to 23.10 eur amid a bullish Kempen Research note, which said its recent acquisition of Berna makes the Dutch biotech firm a "mature vaccine company".
   
TomTom rose 0.52 pct to 36.83 eur, extending yesterday's sharp gains amid target price hikes from ABN Amro and Kempen.

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