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 30-10-2006
10/30/2006
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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 open lower after Wall St weakness, Pearson, miners slip
Leading shares drifted lower in early deals, mirroring Wall Street's weakness on Friday, while an uninspiring trading update from Pearson and profit-taking across the miners also weighed. By 9.10 am, the FTSE 100 index was down 28.6 points to 6,133.3, while the broader indices were mixed, with the Small Caps trading slightly higher. US stocks were weaker on Friday, pulling back from record highs, after a government report stirred concerns that the economy may be slowing too much. The DJIA closed 73.40 points lower at 12,090.26, while the Nasdaq fell 28.48 points to 2,350.62, hit by the release of a Goldman Sachs report that warned of weakness in orders for computer parts. Across Asia overnight, the Nikkei 225 index closed 317.22 points lower at 16,351.85, while Hong Kong was closed for a public holiday. Oil prices were firmer in Asia following news of possible terrorist threats to Saudi Arabian oil installations. Light sweet crude for December delivery was up 0.25 usd at 61.00 a barrel in electronic deals. In London, Pearson kicked things off today in an otherwise quiet start to what should be a hectic week, with a raft of blue-chips due to report. The publishing giant said it is on track to post "highest profits ever" this year while reporting strong trading in its first nine months, in line with its expectations. It added that its nine-month operating profit rose 26 pct and underlying profits rose 15 pct, on a total sales rise of 11 pct. Pearson shares however, were down 6 pence at 775. In reaction, Panmure Gordon reiterated its 'sell' advice and said headline profits came in broadly as expected but not enough to spark upgrades. As a result, it is keeping its EPS forecasts of 38.3 pence this year and 43.2 pence next year unchanged. This leaves the stock at 20.4 times and 18.1 times 2006 and 2007 price earnings -- a level the broker believes is "grossly over-valued". Elsewhere in the sector, Reuters lost 8-1/2 pence to 443, while Yell lost 7-1/2 pence to 614. ITV was also under pressure, down 2 pence to 104-3/4 amid weekend press reports that it is considering a takeover bid for Scottish ITV franchise holder and Virgin Radio owner, SMG.
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Shire was the top blue-chip faller, however, easing 20-1/2 pence to 946-1/2 on profit taking after Friday's well-received third-quarter results. Deutsche Bank reiterated its 'buy' stance, although it lowered its target to 1,272 pence from 1,330 this morning. Elsewhere, mining stocks were weaker this morning, hit by profit taking after last week's strong gains. Xstrata fell 35 pence to 2,230, while Vedanta eased 19 pence to 1,445 and Rio Tinto gave up 11 pence to 2,886. Kazakhmys was also slightly weaker, down 8 pence to 1,208 after a mixed production report, with copper output rising and gold production falling in the third quarter. Elsewhere, Home Retail Group shares were weaker, down 5-3/4 pence at 403, after JP Morgan started coverage on the group with an 'underweight' recommendation and 390 pence target. The broker noted that the group's low EPS growth, returns and cash flow generation warrant a PE discount to the UK retail sector of at least 10 pct and believes these metrics also make HRG unattractive to private equity. On the upside, Standard Life added 8 pence to 291, after the Sunday Express reported yesterday that French insurer AXA is considering making a 7 bln stg takeover approach for the recently floated insurance group. Earlier this month, Axa and Swiss Re reportedly failed in a bid to take over the life assurance arm of Lloyds TSB PLC, Scottish Widows, for 8 bln stg. Utility stocks remained in demand, adding to Friday's gains as investors continued to welcome news that Morgan Stanley plans to invest 3 bln usd in the carbon trading market. British Energy added 5 pence to 424-1/2, while Drax gained 8-1/2 pence to 812-1/2 and International Power moved 1-1/2 pence higher to 336. Hanson shares were also higher after Australian building materials group Rinker rejected a 12.8 bln usd bid from Mexican cement giant Cemex as inadequate. Rinker shares jumped nearly 30 pct in Sydney as investors bet on an improved offer. Hanson shares slumped on Friday as Cemex, its oft-rumoured suitor, confirmed that it had turned its attentions elsewhere.
On the second line, investors in the online gaming sector finally have some reason for cheer today following nearly two months of massive value destruction after the US outlawed internet gambling at the end of last month.
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Online poker operators PartyGaming and 888 Holdings have held talks about a 1.6 bln stg merger, according to reports. PartyGaming added 1-1/4 pence to 31-1/4, while 888 Holdings gained 7 pence to 115. Wellington Underwriting was the top midcap performer, however, up 5-1/4 pence at 116-3/4 after fellow Lloyd's insurer Catlin Group unveiled a 591 mln stg cash offer for the group. Catlin shares were down 15-1/2 pence at 493. Shares in QinetiQ Group were also higher in early deals, up 5-3/4 pence at 188-1/4, after the Sunday Telegraph reported that the group is poised to beat BAE Systems to a 10 bln stg UK Ministry of Defence training contract. On the economic front, UK investors will have a raft of secondary data to digest over the coming week, although nothing is expected to derail another interest rate hike from the Bank of England on Nov 9, which would take the key repo rate up to a five-year high of 5.00 pct. In today's news, the Bank of England is set to show that lending during September moderated slightly. Analysts polled by AFX News expect net mortgage lending to have dipped to 9.0 bln stg during the month from 9.1 bln in August, and net consumer credit to have moderated to 0.7 bln from 0.8 bln. In the US, Wall Street will also get a raft of economic data this week that should give investors a better glimpse about the economy's direction, including closely watched consumer confidence and unemployment numbers. Later today, the Department of Commerce will release its personal income and personal spending data for September.
UK Diary of Events
For a diary of key UK financial and corporate events today, click here
US Summary
For a summary of US stocks at Friday's close of trade, click here
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Paris |
PARIS - Market data at 9.42 am:
Major indices: CAC-40 down 45.34 points or 0.8 pct at 5,350.69 SBF-80 down 54.99 at 6,209.09 SBF-120 down 32.32 at 3,883.73
Volume: 381 mln eur 2 CAC-40 stocks up 37 CAC-40 stocks down Schneider Electric has been suspended until 12.00 pm following its 6.1 bln usd acquisition of American Power Conversion.
Major gainers: Ipsos, up 0.18 eur at 30.18 Pernod Ricard, up 0.60 at 156.80 and bouncing from heavy losses seen late last week following weaker than expected quarterly earnings.
Major losers: Eiffage, down 3.30 or 4.5 pct at 70.80, adding to Friday's declines on speculation that its major shareholder Sacyr could sell stake in order to reinforce its Repsol YPF holding. Arcelor-Mittal, down 0.56 or 1.7 pct at 33.28 and leading CAC-40 declines, as investors took profits after recent run.
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Frankfurt |
FRANKFURT - Market data at 9.10 am
Major indices:
DAX 30 - down 45.27, or 0.72 pct at 6,217.63 MDAX - down 111.92, or 1.29 pct at 8,582.06 TecDAX - down 8.73, or 1.27 pct at 680.21 DAX future - down 30 at 6,247.0 Oil - up 0.25 usd at 61.00 usd a barrel from 60.75 at Friday's close. Gold - 601 usd Euro/dollar - 1.2717 usd, down from 1.2728.
DAX 30 risers/outperformers MAN AG, up 0.13, or 0.27 pct at 69.42; Henkel, up 0.33, or 0.31 pct at 105.14; E.ON, down 0.09, or 0.11 pct at 93.62; Lufthansa, down 0.05, or 0.28 pct at 17.65; DAX 30 fallers Infineon, down 0.11, or 1.15 pct at 9.42; Concerns at BenQ insolvency VW, down 1.85, or 2.35 pct at 76.86; WestLB cuts to 'reduce' BMW, down 0.80, or 1.77 pct at 44.4; Lower ahead of Q3 due Wednesday. ThyssenKrupp, down 0.32, or 1.06 at 29.80; Profit taking following rally TUI, down 0.17, or 0.99 pct at 17.08;
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Forex |
Sydney 0617 GMT |
Sydney 0318 GMT |
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US dollar |
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yen 117.40 |
up from |
117.31 |
sfr 1.2489 |
unchanged |
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Euro |
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usd 1.2717 |
down from |
1.2728 |
stg 0.6704 |
down from |
0.6707 |
yen 149.34 |
up from |
149.31 |
sfr 1.5894 |
down from |
1.5899 |
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Sterling |
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usd 1.8972 |
down from |
1.8979 |
yen 222.67 |
up from |
222.56 |
sfr 2.3707 |
up from |
2.3698 |
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Australian dollar |
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usd 0.7691 |
down from |
0.7698 |
stg 0.4053 |
down from |
0.4057 |
yen 90.290 |
up from |
90.280 |
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Advfn Plc, 26 Throgmorton Street, London, EC2N 2AN +44 (0) 870 794 0236
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