UK/Euro Financial Market Daily Morning Briefing 27-04-2006

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London shares lower in opening deals with miners down on profit-taking

Leading shares were lower in early deals, as mining stocks fell victim to profit-taking and oil stocks were impacted by the easing price of crude futures, dealers said.
   
At 9.07 am, the FTSE 100 was down 33.7 points at 6,070.6. The broader indices were lower, with the exception of the FTSE Small Cap index.
   
Volume was healthy, with 342.3 million shares changing hands 33,961 deals.
   
Overnight on Wall Street, US stocks enjoyed a strong session, with the Dow Jones Industrial Average closing at his highest level for more than six years.  The DJIA rose 71.24 points to 11,354.49.
   
Meanwhile, in Asia, the Nikkei 225 closed up 58.61 points at 17,114.54, while the Hang Seng closed up 70.19 points at 16,742.85.
   
Still in Asia, oil prices were lower after the latest US inventory data showed a smaller-than-expected decline in US crude and petrol stocks.
   
New York's main contract, light sweet crude for June delivery, was down 13 cents at 71.80 usd from the US closing price of 71.93 usd.
   
The benchmark contract closed down 95 cents in the US after petrol supplies fell for an eighth week, but the fuel's import level was among the highest on record and refinery activity climbed 2 pct.
   
In London, Royal Dutch Shell fell 14 to 2,024, with BP down 5 at 693.

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Heavyweight mining stocks came under pressure following their strong recent run on the back of the commodity price boom.
   
Xstrata fell back 48 at 2,033, with Anglo American down 44 at 2,373, Kazakhmys 21-1/2 lower at 1,184, BHP Billiton dropping 17 at 1,155, Antofagasta giving up 23 at 2,445, and Rio Tinto falling 31 to 3,098. Mid-cap Vedanta Resources shed 52 at 1,568.
   
Elsewhere, British Energy continued yesterday's declines, down 18-1/2 at 663-1/2, following a bearish note on the carbon emissions trading market from UBS. Mid-cap peer Drax fell 25 to 768.
   
The Swiss broker said the price of carbon allowances in Europe fell by more than 10 pct yesterday as three countries reported surprising surpluses.
   
Profit-taking hit Centrica following gains yesterday after Prime Minister Tony Blair ruled out blocking any bid from Russia's Gazprom. The share were 6 pence lower at 301.
   
On the upside, Vodafone added 1-3/4 at 129-1/2 following completion of the sale of its Japanese business. Some 6 bln stg of the proceeds will be returned to shareholders.
   
AstraZeneca advanced 13 to 3,004 on news it has signed a deal to co-promote Abraxis BioScience's chemotherapy product Abraxane in the US, and at the same time sold its US anaesthetic and analgesic product portfolio to the drug maker.
   
Astra is due to publish first quarter earnings at 10.00 am today.
   
Analysts forecasting a near 10 pct hike in sales to 6.29 bln usd, operating profits up 25 pct to 1.81 bln usd and earnings 32 pct higher to 83 cents a share.

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Rival GlaxoSmithKline, up 5 at 1,491, follows two hours later, with the market flagging earnings growth of 12 pct to 23 pence per share and pretax profits of around 1.85 bln stg, up from 1.7 bln last time.
   
Also at noon Shire, down 2-1/2 at 848-1/2, is expected to unveil earnings per ADR, before exceptionals, to grow around 6 pct to 35 cents, on a 20 pct rise in sales, to 400 mln usd.
   
Among the mid-caps, Halma gained 5 at 189 after saying it expects full year pretax profit for the year to April 1 2006 to be slightly ahead of the top end of current market expectations.
   
The maker of products such as fire and gas detectors and precision optical equipment said all its businesses enjoyed a very strong final quarter.
   
On the downside, Provident Financial slipped 12 to 637 amid disappointment over the Competition Commission's ruling that credit lenders share customer data.
   
The Competition Commission found that a lack of competition in the UK home credit market means customers face higher prices for their loans than would be expected in a competitive market.
   
In reaction, Bridgewell reiterated its 'underweight' recommendation, saying the report is a reminder of the potential downside in the group's core business.

US Summary

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

Diary of Events

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

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PARIS - Market data at 9.59 am:

Major indices:
   
CAC-40 down 15.33 points at 5,236.99
SBF-80 down 12.75 at 6,169.37
SBF-120 down 10.51 at 3,813.68

Volume: 828 mln eur
10 CAC-40 stocks up
28 CAC-40 stocks down
2 unchanged

Major gainers:
   
Alstom, up 3 eur or 4.3 pct at 72.80 after Bouygues agreed to buy the French government's 21 pct stake in the company, while also buying 50 pct of Alstom's hydro power business.
   
Bouygues, up 1.16 eur or 2.7 pct at 44.11. It paid about 2 bln eur for the French government's stake in Alstom, and the two companies have signed a partnership deal.
   
Accor, up 0.80 at 50.35 after posting first quarter sales in line with expectations, while also announcing the sale of its 50 pct stake in business travel agency Carlson Wagonlit for 465 mln usd.

Major losers:
   
Alcatel, down 0.52 eur or 4.2 pct at 11.96. The group's first quarter results were broadly in line with estimates, but some analysts noted a more downbeat outlook for sales in the second quarter than anticipated.
   
EDF, down 1.57 or 3.2 pct at 47.01 and Suez, 0.49 lower at 31.03; dealers said a decline in futures contract prices for electricity was weighing on energy utilities across Europe.

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German shares at a glance outlook; Altana, Siemens, Bayer in focus on figs

Forthcoming Events
   
Today
   
April jobless (10.00 am)
   
Axel Springer AGM, Berlin (10.00)
   
Hugo Boss Q1 press conference
   
Bayer Q1 results analyst conference call
   
DaimlerChrysler Q1 results
   
Celesio AGM
   
Germany's six leading economic institutes publish spring report

Tomorrow
   
Bundesbank president Axel Weber to deliver speech on "Independent monetary
policy in Europe", University of Wuerzburg (0800 GMT)
   
Puma Q1 results, analyst conference call
   
Bayer AGM, Cologne
   
Volkswagen Q1 results
   
EnBW AGM

Market News/Sentiment
   
Bayer slightly higher pre-open as Q1 sales, EBIT beat expectations
   
Merck KGaA higher pre-bourse as market cheers Q1 figs, hiked outlook
   
Commerzbank upgraded to 'overweight' from 'neutral' at JP Morgan, target raised to 36.7 eur from 26
   
Allianz upped to neutral vs reduce at UBS, target 135 eur - dealers
   
Bilfinger Berger lower pre-open as Deutsche cuts to 'hold' vs 'buy', target 50 eur

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