UK/Euro Financial Market Daily Morning Briefing 31-03-2006

New trading platform launched featuring 24 hour trading, auto rollovers, position amalgamation and an advanced order system. For more Click Here

London shares ease in early deals, qtr-end profit-taking after strong run

UK blue chips traded moderately lower in early deals, following a mixed session overnight on Wall Street, and as the last day of the first quarter prompted a bout of mild profit-taking after recent strong gains, dealers said.
   
At 9.12 am, the FTSE 100 was modestly lower, losing 1.0 point at 6,015.3 after yesterday's strong gains, with the broader indices mixed.
   
Overnight on Wall Street, the DJIA closed 65 points lower at 11,150.70. The Nasdaq Composite Index registered five-year highs, gaining 3.04 points at 2,340.82, while the S&P 500 Index was 2.65 points easier at 1,300.25.
   
Across in Asia, trading was modest with the Nikkei 225 closing up 14.32 points at 17,059.66, after reaching fresh five-and-a-half year highs.
   
Meanwhile, the Hang Seng ended the morning 8.53 points higher at 15,889.22.
   
Oil prices eased in Asian trade after sharp gains in the US as investors locked-in profits after a week of strong gains.
   
At 9.13 am, New York's main contract, light sweet crude for delivery in May, was down 42 cents at 66.73 usd a barrel from 67.15 in the US yesterday, its highest level in almost two months.
   
On the upside, Man Group was the strongest blue chip gainer, up 86 pence at 2,490 after issuing a strong trading statement.
   
The group said it expects annual profit will beat market forecasts of 1.197 bln usd, helped by a strong performance by its funds. 

With A-Day only a few days away it's the perfect time to review your pension arrangements. Whether you already have a pension or not, A-Day could dramatically affect your plans for retirement, so it's a good idea to know what to expect. For all the facts and professional pension advice, click here.

In response, Bridgewell Securities reiterated its 'overweight' stance and said the update underlined why the shares have been so strong recently, with a level of performance fees above expectations.
   
Fund management peer New Star Asset Management however, fared less well down 3-1/2 pence at 406-1/2 strong maiden full year figures prompted profit-taking.
   
In response, Citigroup lifted its price target to 475 pence from 420 as it reiterated its 'buy' recommendation on the group, noting that 2005 EPS rose 88 pct to 14.7 pence, which was 9 pct higher than its forecast of 13.5 pence, due to higher revenues from UK mutual funds and hedge fund performance fees.
   
Back among the blue chip risers, the M&A rumour mill was in action again, providing support for Unilever, 10 pence firmer at 595 on market talk that Goldman Sachs is putting together a consortium bid for the group.
   
ITV was also in demand, following a report in the FT that the group's baord was last night considering a new offer from a private equity consortium, up 0-1/4 at 125-1/4.
   
The paper said the latest proposal includes a cash alternative of 40 pence a share on top of the 86 pence in cash it originally offered.
   
Elsewhere, retailer Marks & Spencer edged higher, up 7 pence at 560, after the UK retailer announced the completion of the sale of its Kings Super Markets Inc to a US investor group for 61.5 mln usd in cash.
   
In response, Citigroup reiterated its 'buy' advice saying this is the third time M&S has tried to sell this business, and noting that the sale represents the last part of M&S' refocusing programme and removes an operation that is strategically challenged.
   
On the downside, mining stocks were hit by profit taking after the sector's record gains yesterday, although further overnight strength across precious metal prices and a bullish report by Morgan Stanley limited the sector's losses.
   
Antofagasta lost 18 pence at 2,142; Rio Tinto was 21 pence lower at 2,960; XStrata was 12 pence weaker at 1,880; Anglo American was 13 pence lower at 2,233 while BHP Billiton shed 5-1/2 pence at 1,066.
   
Tate & Lyle slumped by 2 pct, down 11-1/2 at 567-1/2 after Deutsche Bank cut its price target on the food manufacturer after a mixed trading update earlier in the week.

'An investment phenomenon', 'Sweeping the country', 'Taking the market by storm', and 'The tax free secret to backing shares', are just a few examples and, believe me the list is a long one. Click here to find out more.

The broker lowered its target to 550 pence from 600 as it reiterated its 'hold' advice saying the uptick in the tax rate due to a shifting mix of profitability and a large working capital outflow relating to the increase in world sugar prices caused a reduction in cash flow.
   
On the second tier, Carphone Warehouse was the strongest performer, up 13 pence at 324-1/2 after Merrill Lynch raised its target price 375p while maintaining its 'buy' rating.
   
Merrill Lynch said that group is due to unveil its detailed strategy for local loop unbundling in the UK on April 11, where it believes the group could become a truly disruptive pricing force in the provision of residential broadband. 
   
Meanwhile, broker action lent support to William Hill after UBS upgraded the stock to 'buy' from 'neutral' on a more positive outlook for the UK betting sector, with the stock adding 16-1/2 pence at 599.
   
UBS said that despite the increase in machine duty, it believes that growth rates in 2006 will be strong, driven by the World Cup soccer and exceptional cash flows.
   
Aggreko also benefited, up 3 pence at 320 after winning contracts to provide temporary power generation in Kenya and in the Republic of Yemen.
   
The contracts are likely to be worth in excess of 55 mln usd over the next two years.
   
Among the fallers, Shanks shed 2-1/4 pence at 176 following as its trading update failed to inspire.
   
The waste management group said trading is expected to be in-line, but warned there will be a small negative impact on pretax profit due to an additional IFRS accounting change.
   
On the economics front the UKs Gfk Consumer Confidence Survey is due out this morning.
   
Finally, US investors will also await key macro economic data today, including Personal Income and Consumer Spending readings ahead of the opening, and the final reading of the University of Michigan Consumer Sentiment and the March reading of the Purchasing Managers, both due in late afternoon.

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

Are you ready for a ‘smash and grab’ on the world’s ‘hidden’ money-mountain?
Great! The get-away car’s about to leave!
Read how a disillusioned city-boy opens ‘money-floodgates’ to YOU! Click Here

PARIS - Market data at 08.58 BST

Major indices:
   
CAC-40 down 3.45 points or 0.07 pct at 5,236.65
SBF-80 up 12.78 points or 0.21 pct at 6,049.93
SBF-120 up 0.07 points at 3,802.44

Volume: 667 mln eur
17 CAC-40 stocks up
21 CAC-40 stocks down
2 CAC-40 stocks unchanged

Major gainers:
   
Electricite de France (EDF), up 1.02 eur or 2.19 pct at 47.57, after an upgrade to 'buy' from 'hold' by Deutsche Bank.
   
Schneider Electric, up 1.10 eur or 1.25 pct at 89.10. Earlier this week it agreed to buy German electrical equipment producer Merten.
   
Lafarge, up 1.10 eur or 1.19 pct at 93.45. Yesterday it was upgraded to 'buy' from 'neutral' at UBS.

Major losers:
   
Suez, down 0.42 eur or 1.27 pct at 32.64, amid continuing uncertainty about Enel's intention regarding a widely expected takeover bid.
   
Alcatel, down 0.13 eur or 1.00 pct at 12.83, amid merger talks with Lucent and reports that the French government doesn't want Alcatel and Thales to have a satellite business tie-up unless EADS is also involved.
   
Dexia, down 0.16 eur or 0.74 pct at 21.40

Want to know what the smart money is buying? Get a little foresight every fortnight. Our team of stock market analysts produce four Technical Analysis reports every two weeks, featuring some of the hottest FTSE stocks. Using their expertise they identify significant movements in share prices – and we pass their expert insights on to you! Click here for your Free Reports.

FRANKFURT - Market data at 08.49 BST

Major indices:
  
DAX 30 - 5,968.33, down 15.86 points or 0.27 pct
MDAX - 8,679.15, up 11.39 points or 0.13 pct
TecDAX - 726.92, down 0.41 point or 0.06 pct
DAX future - 6,005.00, up 14.00 points or 0.23 pct

Major gainers:
   
Infineon, up 0.10 eur or 1.18 pct at 8.55, amid expectations the company will release details of the IPO of its DRAM unit today
   
Henkel, up 1.07 eur or 1.13 pct at 95.87, as it said it has acquired the Brazilian consumer adhesives company Alba Adesivos from Hexion Specialty Chemicals for an undisclosed sum.
   
MAN, up 0.51 eur or 0.89 pct at 57.66
   
RWE, up 0.49 eur or 0.70 pct at 70.87
   
SAP, up 1.15 eur or 0.65 pct at 178.95, amid vague rumours IBM may be interested in the German software giant 

Major losers:
   
ThyssenKrupp, down 0.27 eur or 1.13 pct at 23.69
   
Linde, down 0.78 eur or 1.08 pct at 71.51
   
Deutsche Post, down 0.17 eur or 0.81 pct at 20.74
   
Deutsche Boerse, down 0.96 eur or 0.80 pct at 118.79, with dealers saying that news its supervisory board "welcomed" its management board's decision to enter concrete talks with Euronext on a potential combination was "no surprise" as the head of the board has already said so
   
DaimlerChrysler, down 0.31 eur or 0.65 pct at 47.25

Blue Square offer a wide range of fixed odds financial bets including daily wagers on the closing prices of the FTSE, the Dow and other major indices. Currency, takeover situations, interest rate changes and stock lottery bets are also available. Free £10 bet for new users - for further details click here.

AMSTERDAM - Market data at 08.52 BST

Major indices:

AEX index             470.93, down 1.65 point
AMX Midcap index      660.50, down 0.68 point
Government bonds      unchanged to slightly lower

  
Major losers:
   
Philips lost 1.57 pct or 45 cents at 28.20, trading ex-dividend of 40 cents
   
DSM also traded ex-dividend, of 0.71 eur. The shares fell 1.46 pct or 56 cents at 37.88
   
Financials weighed on the index, with ABN Amro shedding 0.8 pct at 24.86, Fortis slipping 0.74 pct at 29.58 and ING off 0.55 pct at 32.61 while Aegon eased 0.32 pct at 15.36
   
Second-liner ASMI gave up 2.8 pct at 16.33 after yesterday's sharp gains amid increasing pressure from shareholders for the chip equipment maker to split up
   
Stork lost 1 pct at 45.65 after a newspaper report said the Dutch ministry of defence plans to award the contract for the maintenance of military airplanes to Italian industrial group Avio, passing over Dutch companies such as KLM and Stork Aerospace

Major gainers:
   
Nutreco outperformed, rising 3.41 pct to 48.17 after an upgrade to 'buy' from 'hold' at ING Research with a raised target price of 61.40 eur from 47, based on an analysis of Nutreco's strategic options following the recent divestment of its 75 pct stake in Marine Harvest
   
Euronext was up 2.6 pct at 67.15 after Deutsche Boerse said its supervisory board "welcomed" the decision of its management board to enter into concrete negotiations with Euronext on a potential combination of the two companies
   
TomTom led blue chip gainers, up 1.7 pct at 28.65, while ASML put on 1.21 pct at 16.68 and TNT advanced 1.1 pct at 28.53

Forex

ADVFN Services