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 27-07-2006
07/27/2006
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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 higher at open as Shell beats forecasts
Leading shares were higher in opening deals as better-than-expected results from oil heavyweight Royal Dutch Shell added to increased hopes the Fed Reserve will end its cycle of rate hikes in the US, dealers said. At 9.16 am, the FTSE 100 was 28.7 higher at 5905.8, but off a high of 5925.5, with the broader indices positive. Meanwhile, Wall Street closed a touch lower as investors cashed in on recent gains following disappointing results from the likes of Boeing and Amazon.com. This offset hopes the Federal Reserve's cycle of interest rate hikes could be drawing to a close after the publication of the Beige Book yesterday revealed inflation was in check. The DJIA lost 1.20 points to 11,102, after rising a total of 230 points the first two days this week, with the S&P 500 down 0.48 to 1,268.40 and the Nasdaq off 3.44 to 2,070.46. And today investors will wade through another heavy session for earnings with the likes of Exxon Mobil, Kellogs and Coca Cola Enterprises all publishing numbers. In economics, new home sales data is forecast to show a fall to a seasonally adjusted annual pace of 1.160 mln units from 1.234 mln in May. Over in Asia, the Nikkei 225 index closed up 295.71 points 15,179.78 while the Hang Seng finished the morning 229.49 firmer at 16,846.73. Back in London, Shell was an early winner, 31 pence higher at 1971, after the oil major's 26 pct rise in second quarter profits topped expectations and outperformed rivals BP and BG whose recent numbers came in short. The group's net profit, on an adjusted current cost of supply basis and after adding back one off charges, rose to 6.546 bln usd from 5.194 bln last time, ahead of the consensus figure of 6.125 bln usd. In response, Merrill Lynch reiterated its 'neutral' advice, describing the results as "strong" with net income well above its forecast and 7 pct ahead of a consensus of 6.125 bln. The news also provided a fillip for peers BP, 8-1/2 firmer at 643 and BG, 10 to the good at 710.
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But Rolls-Royce was the top performing blue chip, 14-1/2 higher at 436 as the jet engine maker reported higher underlying interim profits thanks to strong aftermarket sales growth, and the company expects this trend to continue. In the six months to June 30, underlying pretax profits rose 22 pct to 324 mln stg, while total sales increased to 3.39 bln stg from 3.18 bln previously. In response, Merrill Lynch reiterated its 'buy' advice and said operating profit was in line but "cash was great". Kingfisher was also courted, up 6-1/4 at 242-3/4 after Europe's largest home improvement retailer released a better-than-expected trading update. In response, Investec said the news implies that a recovery in the group's B&Q operations is underway although some slighter slower growth in France took "a little steam" out of the update. Nevertheless the broker said overall the news underlines its "Trading Buy" stance. Still in earnings, BT edged 3/4 higher at 238-1/4 after the telecoms group's first quarter results came in slightly above estimates. Earlier, BT said sales for the three months to end June rose 3 pct to 4.864 bln stg, ahead of the 4.84 bln forecast, as its consumer-facing arm grabbed a 30 pct slice of the market for new broadband users. But Merrill Lynch remained 'sellers' of the stock on continued broadband concerns and the knock-on effect it could have on the voice market. And Centrica reversed initial falls to trade 5 higher at 297-1/2 as planned tarriff increases at its British gas unit offset a sharp slowdown in interim profits. This morning Centrica revealed operating profit was down 29 pct to 692 mln stg, with British Gas reporting losses of 143 mln stg for the first half of the year. As a result, the group is to raise prices for a second time this year, with gas bills going up 12.4 pct and electricity prices rising by 9.4 pct. In response, Goldman Sachs described the figures as weak and worse than its forecasts. But it added, Centrica has announced residential energy tariff increases for the second half which could lead to a faster recovery in profitability than it currently forecast for the British Gas Residential Energy business.
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Miners also lent support as gold rallied on growing expectations the US Fed will not raise rates and as copper prices continued to rise on strike fears in Chile. Sentiment was further boosted as UBS raised EPS estimates by an average of 11 pct across the sector on higher price forecasts for copper, nickel, iron ore, and platinum. In response, Xstrata added 38 at 2072, Rio Tinto took on 44 at 2774, Kazakhmys firmed 17 at 1202, BHP rose 14 at 1038 and Anglo American gained 23 at 2173. And PartyGaming continued to be courted, up 2 at 111, on on reports the US bill to ban internet gambling is losing its race to passed by the Senate before its summer recess amid growing opposition from lawmakers and trade groups. In contrast, as expected results from Legal & General failed to inspire -- down 1-1/2 at 125-3/4. The insurer delivered first half operating profit up 17 pct, in line with market expectations, helped by robust sales of pensions and investment products in the UK. Still on the downside, AstraZeneca and Smith & Nephew lost 26 at 3294 and 3-3/4 at 428-1/4 ahead of results at 11.00 this morning. On the second-line, Bradford & Bingley was the biggest casualty, off 17-3/4 at 444 after the mortgage bank announced a bigger-than-expected increase in the sum it is setting aside to cover compensation claims by aggrieved endowment customers. The UK's ninth-biggest bank, said it was setting aside a further 89.4 mln stg, blaming a higher than expected number of complaints from customers who claim they were mis-sold endowment policies. And EMI slumped 7-3/4 at 254 after the music group confirmed it will not pursue its proposed acquisition of Warner Music Group Corp "for the time being". The move follows an European Court annulling authorisation of the SonyBMG joint venture.
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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Amsterdam |
AMSTERDAM - Market data at 10.15 am Major indices AEX 449.03, up 2.65 points AMX Midcap 578.42, up 0.68 points Government bonds were up
Major gainers Royal Dutch Shell was up 1.90 pct to 27.88 eur after posting a 26 pct rise in second-quarter profits, which was better than expected Heineken gained 1.30 pct to 36.67 eur after the stock was upped to 'neutral' from 'sell' at Goldman Sachs, with an increased price target of 36 eur Second-liner CSM was up 1.12 pct to 22.63 after the company said it has bought US desserts and cakes manufacturer CGI Desserts, for 70 mln usd Fortis rose 0.77 pct to 27.47 ABN Amro gained 0.89 pct to 21.49 eur
Major losers Vedior fell 5.20 pct to 15.32 eur after the staffing group reported second-quarter results at the low end of analysts' expectations DSM slumped 4.77 pct to 32.37 after the company said that third-quarter earnings results could be lower than last year after posting second-quarter earnings largely in line with expectations Randstad was down 1.85 pct at 45.20 eur as staffing shares were hit following Vedior's poorly-received second quarter figures USG People lost 1.52 pct 55.10 eur
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Frankfurt |
FRANKFURT - Market data at 10.17 am
Major indices: DAX 30 - 5,610.08, up 26.98 points or 0.48 pct MDAX - 7,799.73, up 77.99 points or 1.01 pct TecDAX - 618.89, up 4.91 points or 0.80 pct DAX future - 5,635.00, up 22.00 points or 0.19 pct
Major gainers: Continental AG, up 1.50 eur or 1.98 pct at 77.08 ThyssenKrupp, up 0.51 eur or 1.92 pct at 27.04 E.ON, up 1.70 eur or 1.89 pct at 91.85 Deutsche Boerse, up 1.85 eur or 1.70 pct at 110.47 Linde, up 1.04 eur or 1.60 pct at 66.03, as it said it has agreed to sell its 35 pct stake in the Komatsu Forklift Co (KFL) to Japanese construction and mining equipment maker Komatsu Ltd, which already holds the remaining shares in KFL
Major losers: Siemens, down 1.54 eur or 2.39 pct at 62.96, after the industrial conglomerate reported third quarter results that were largely in line with expectations, and as some investors were disappointed with the margin performance of some of its units and with the company's outlook Infineon, down 0.08 eur or 0.97 pct at 8.19 Deutsche Post, down 0.11 eur or 0.57 pct at 19.11 Hypo Real Estate, down 0.25 eur or 0.57 pct at 43.57 MAN, down 0.15 eur or 0.28 pct at 54.17
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Paris |
PARIS - Market data at 10.26 am:
Major indices: CAC-40 up 27.86 points or 0.56 pct at 4,970.86 SBF-80 up 41.91 points or 0.77 pct at 5,503.48 SBF-120 up 21.43 points or 0.60 pct at 3,588.98
Volume: 854 mln eur 30 CAC-40 stocks up 8 CAC-40 stocks down 1 CAC-40 stock unchanged Arcelor removed from CAC-40; no replacement yet named
Major gainers: Dassault Systemes, up 4.30 eur or 11.92 pct at 40.36 Thomson, up 0.72 eur or 5.71 pct at 13.33 Pernod Ricard, up 8.50 eur or 5.63 pct at 159.50 Capgemini, up 1.85 eur or 4.68 pct at 41.35 Havas, up 0.16 eur or 4.34 pct at 3.85
Major losers: Alcatel, down 0.35 eur or 2.78 pct at 8.39 France Telecom, down 0.37 eur or 2.23 pct at 16.23 Danone, down 0.70 eur or 0.68 pct at 101.80
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