UK/Euro Financial Market Daily Morning Briefing 30-07-2007

Read our new Spread Betting interviews. Click Here.

London shares up early on, with ICI sharply higher on M&A news

Leading shares were higher in early deals, with ICI up sharply on M&A news, as investors eagerly await the Bank of England's key interest rate decision on Thursday and the US July jobs report on Friday.
   
At 9.01 am, the FTSE 100 index was up 17.1 at 6,232.3, after closing 36 points down on Friday at 6,215.2, while the FTSE 250 index was 136.2 points higher at 11,120.0.
    
In the US, Wall Street extended its steep decline on Friday, propelling the Dow Jones industrials down more than 500 points over two days after investors gave in to mounting concerns that borrowing costs would climb for both companies and homeowners.
   
The Dow Jones ended the week 208.10 points down at 13,265.50, while the Nasdaq Composite was 37.10 lower at 2,562.24 and the S&P 500 index fell 23.70 to 1,458.95.
   
Meanwhile, in Asia this morning, Tokyo's Nikkei 225 index closed up 5.49 points at 17,289.30, while Hong Kong's Hang Seng was 145.28 points lower at 17,138.53 by midday.
   
Still in Asia, oil prices were lower in morning Singapore trade on profit-taking even as key producer Iran expressed opposition to any hikes in OPEC crude output.
   
Light sweet crude for September delivery, was down 35 cents at 76.67 US dollars a barrel from 77.02 dollars in late US trade Friday. Brent North Sea crude for September eased 41 cents to 75.85 usd.    

Back in London, Imperial Chemical Industries soared to the top of the blue-chip leaderboard, up over 7 pct or 43 pence at 620, this following news from Dutch chemicals group Akzo Nobel NV that it has made a renewed takeover approach to the board of ICI with an increased offer proposal of 650 pence per share in cash and said ICI rejected that offer.
   
Meanwhile, the UK media group Pearson was higher in early deals, up 15 at 785 following its results this morning.
   
The world's largest education publisher reported a 74 pct rise in half-year profits and raised full-year guidance for part of its education business, predicting that 2007 would be "another good year".
   
The Financial Times and Penguin books owner, said adjusted pretax profit was 54 mln stg on underlying revenue up 6 pct to 1.7 bln, in line with the average analysts' forecast.
   
In reaction, UBS said that Pearson's H1 results were significantly ahead of expectations with EBITA at 93 mln stg which was ahead of consensus estimates at 67 mln stg and earnings per share of 3.1 pence versus consensus expectations of 0.5 pence.

You've probably heard about spread betting - but maybe the risks have put you off. The Finspreads Trading Academy, the most popular way into the world of spread betting, takes you through the whole subject from a keen amateur's point of view. So don't be startled by spread betting - get started. Click Here

Ahead of its results today, HSBC moved up 9 to 889-1/2. The bank is expected to report an increase in its interim profit of just 1.6 pct today, held back by burgeoning bad debts among its US sub-prime mortgage customers.
   
HSBC, the UK's biggest listed bank, will report pretax profit for the six months to June 30 of 12.717 bln usd, up from 12.517 bln usd in the same period last year, according to the average of six analyst forecasts collected by Thomson Financial News.
   
On the downside, confectionery giant Cadbury Schweppes made early losses, down 15 at 588-1/2. The company had been expected to provide an update on takeover interest for its US drinks business with interim figures this Wednesday but global debt markets has thrown the plan off track.
   
The company is expected to report sales at the top end of its 4-6 pct target range but a decline in underlying margins when it publishes first half results next Wednesday.
   
However, the numbers have been overshadowed by Cadbury's decision to indefinitely postpone the sale of its US drinks arm. A broker downgrade helped to send Northern Rock lower, giving away 3 at 789.    

Earlier this morning, Lehman Brothers downgraded the bank to 'equal-weight' from 'overweight' with a price target cut to 858 pence from 956 pence.  Lehman Brothers said Northern Rock's management guidance would suggest a 2008 price to earnings multiple of 8.2 times and a yield of 6.8 pct.
   
The broker added, however, that it sees little likelihood of a recovery in Northern Rock's shares in the near term and it is more cautious than management guidance.
   
GlaxoSmithKline's (GSK) shares dropped 15 to 1,210 ahead of the Food and Drug Administration advisory panel's discussion later today over GSK's Avandia drug.
    
Moving onto the second line, Beazley rose over 7 pct or 11-1/2 pence to 161-1/2 in morning trades, after the Lloyd's of London insurer reported that first half pretax profits had more than doubled.
   
Earlier today, the group said that first half pretax profits rose to 60.2 mln stg from 28.3 mln stg, buoyed by a 10 pct rise in gross written premiums.
   
"The headline numbers surpassed our expectations and those of the market," said Charles Coyne, an analyst at KBC Peel Hunt, in a note to investors. He also upgraded his share recommendation on the market to 'Hold' from 'Reduce'.

Lafite 1998:             Jan 06 - June 07                + 240%

Haut-Brion 1998:    August 06 - June 07          + 100%

Lafite 2005:            August 06 - June 07          + 57%

Lafite 1996:             November 06 - June 07     + 66%

Above is just a small selection of the wines we trade, from which our clients are making considerable tax-free profits.  For a free information pack, click here.

Soco International PLC moved ahead this morning, up 95 at 1,860, after Credit Suisse initiated coverage on the company with a price target offering significant upside potential.
   
Earlier today, Credit Suisse initiated coverage with a 'neutral' view and 2,000 pence price target.
   
The miners helped to fuel Footsie rises, continuing gains in Australian deals overnight, as investors buy into the sector following last week's weakness, and also buoyed by higher base metals prices.
   
In early morning trade, Vedanta Resources gained 60 to 1,678, Kazakhmys added 35 to 1,261, Xstrata rose 44 to 3,121, Anglo American was up 61 to 2,800, Antofagasta added 17 to 691, while Lonmin climbed 60 to 3,383.
   
Elsewhere, UK record label EMI Group made early gains, up 5-3/4 at 257-3/4 after news buyout company Terra Firma has been granted a final extension by the UK Takeover Panel for its 2.4 bln stg bid for EMI amid reports that financing for the deal could fall through due to the recent turmoil on global debt markets.
   
Shareholders have been given a final deadline of 1.00 pm on Wednesday to accept Terra Firma's 265-pence-a-share offer, with some 84.94 pct having done so by Friday last week.
   
On the 250 downside, commercial security printer De La Rue lost almost 7 pct or 56-1/2 at 769, after the company said a police investigation is being conducted following allegations of corruption made by a former employee against whom De La Rue had obtained a judgement for the recovery of money stolen from
it.
   
Finally, investors appeared unimpressed by Ultra Electronics results this morning, as shares dropped 14 at 1,079.
   
This morning, Ultra reported pretax profits before amortisation of 26.2 mln stg for the first half against 23.8 mln stg for the same period in 2006, after a strong civil aerospace market drove growth in its Aircraft and Vehicle Systems division.

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 Friday's close of trade, click here

..in St Lucia's UNESCO's World Heritage Site.  Superb buy to let opportunity in a breathtaking location with immediate income and dramatic capital appreciation.  For more information click here.

PARIS - Market data at 10.39 am:

Major indices:
   
CAC-40 up 27.67 points or 0.49 pct at 5,671.63
SBF-80 up 60.96 or 0.89 pct at 6,895.40
SBF-120 up 20.74 or 0.50 pct at 4,141.30

30 CAC-40 stocks up
10 CAC-40 stocks down

Major gainers:
   
Michelin up 2.42 eur or 2.69 pct at 92.50, lifted by upbeat broker comments following Friday's first-half results. SocGen analysts raised their target  to 108 eur from 105 and reiterated their 'buy' rating.
   
Alstom up 2.97 or 2.31 pct at 131.36
   
ArcelorMittal up 0.68 or 1.52 pct at 45.29 ahead of its first-half results on Wednesday.
   
Schneider Electric up 1.23 or 1.31 pct at 95.43 after Goldman Sachs added the group to its 'conviction buy' list, citing weak performance by the stock in recent months and the prospect of healthy first-half results on Wednesday.
   
France Telecom up 0.23 or 1.19 pct at 19.63 as Morgan Stanley upgraded the shares to 'overweight' on valuation grounds, with the broker saying the shares offer 29 pct upside to its 25 eur target following an 8 pct drop post-dividend payment.

Major losers:
   
Groupe Steria down 1.70 or 3.71 pct at 44.16 as analysts said the French IT services company's agreed 130 pence a share offer for Xansa PLC looks on the high side.
   
Suez down 0.49 or 1.28 pct at 37.72
   
Societe Generale down 1.24 or 0.99 pct at 124.50 as banks remained under pressure from tensions in the credit markets.

Most active stocks:
   
France Telecom, 3.0 mln shares
   
Axa, 2.6 mln shares; up 0.25 or 0.89 pct at 28.46

LOW-RISK, AWARD-WINNING, INVESTMENT STRATEGY
 
£2,000 to over £80,000 Tax-Free

Click Here

BRUSSELS - market data at 9.55 am

Main index
   
Bel 20 up 23.67 points or 0.55 pct at 4,365.66

Bel 20 gainers
   
UCB rises 0.59 eur or 1.51 pct to 39.78 eur; KBC Securities lowers target to 46.0 eur from 49.0
   
Delhaize up 0.98 eur or 1.46 pct at 68.28 eur
   
Solvay up 1.53 eur or 1.41 pct at 110.20 eur; group reaches agreement with the Dow Chemical Company to create a joint venture for the construction of a hydrogen peroxide plant in Thailand
   
InBev up 0.76 eur or 1.30 pct at 59.18 eur; the federation of Belgian drinks retailers (FeBed) says the group's pricing policy, which includes large discounts for supermarkets but not for individual retailers, is unfair and distorts competition in the sector, financial daily De Tijd reports.
   
Fortis up 0.18 eur or 0.62 pct at 29.29 eur; ABN Amro says it is not currently in a position to recommend either the Barclays or the Royal Bank of Scotland-led takeover offer to the bank's shareholders.
   
Colruyt up 1.68 eur or 1.11 pct at 152.98 eur; Petercam cuts target  to 190.0 eur from 195.0, Degroof cuts target to 163.0 eur from 167.0
   
Bel 20 fallers
   
Cofinimmo was down 0.98 eur or 0.74 pct at 132.25 eur
   
Suez fell 0.24 eur or 0.63 pct to 37.91 eur; group said its Energie Services unit has won a 20-year baggage handling contract at Montreal-Trudeau International Airport worth more than 100 mln eur

Outside the Bel 20
   
EVS up 2.53 eur or 3.99 pct at 65.93 eur; KBC Securities ups target  to 73.0 eur from 65.0
   
Option was up 0.27 eur or 3.13 pct at 8.89 eur
   
Innogenetics was down 0.23 eur or 2.68 pct at 8.35 eur

ADVFN Poker will match your first deposit up to $500. All you have to do is open an account with us, deposit money and play in our buzzing cash games or exciting tournaments. We will credit your bonus automatically! Play Now

Amsterdam - market data at 10.34 am

Major indices
   
AEX 530.46, up 0.72 pct
   
AMX Midcap 726.88, up 1.18 pct
   
Government bonds mostly higher

Major gainers
   
Randstad up 2.93 pct at 49.26 eur
   
Vedior rises 2.72 pct at 18.89, price target downgraded to 24.5 eur from 26.5 at Rabo Securities on new legislation in France that cuts subsidy benefits
   
ABN Amro 1.32 pct stronger at 35.36 after Q2 net profits beat expectations, company says cannot recommend any takeover bid to shareholders
   
KPN 1.24 pct firmer at 11.41 after reporting Q2 figures a day early, showing a dip in net profits but saying is on track to meet full-year guidance while also announcing a recommended cash offer for Getronics
   
Getronics advances 20.00 pct to 6.12 eur, approaching 6.25 eur per share offer price
   
USG People adds 6.20 pct to 28.78
   
Major decliners
   
Unilever 0.58 pct lower at 22.33
   
Aegon dips 0.23 pct to 13.09
   
Binckbank down 2.67 pct to 13.50
   
Stork off by 0.33 pct at 47.64
   
Kardan down 3.53 pct at 10.66 eur after announcing that a subsidiary will build a shopping centre in China for a total investment of 57 mln eur

Forex

ADVFN Services