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 31-07-2006
07/31/2006
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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; Severn Trent gains, HSBC lower ahead of results London shares opened shy of the gain line as investor caution ahead of HSBC's results today and the Bank of England's interest rate decision Thursday offset strong starts from Severn Trent and Pearson, dealers said. At 8.52 am, the FTSE 100 was 18.3 points lower at 5,956.6 after closing 45.4 points stronger at 5,974.9 on Friday, while the broader indices traded slightly higher. Friday's trading was supported by a strong rally on Wall Street after a sharp slowdown in US second-quarter gross domestic product growth increased expectations the Federal Reserve's run of interest rate hikes will come to an end. The Commerce Department said GDP growth slowed to a 2.5 pct annual rate from 5.6 pct in the first quarter, below the expected 3 pct flagged in by most analysts. The Dow Jones Industrial Average closed up 119.30 points at 11,219.70, while the S&P 500 index ended 15.35 points higher at 1,278.55 and the Nasdaq Composite finished 39.67 points to the good at 2,094.14. Today, US investors will wade through another session of earnings reports, with figures due from AGCO, Avon Products, Tyson Foods and UAL before the open, and Grey Wolf, MetLife and Vulcan Materials after the close, among others. And on the economic front in the US, investors will be focusing on the Chicago Purchasing Managers' Index (PMI) data for indications of the state of the economy's health. Market consensus points to continued expansion, albeit retreating, with the PMI seen at 57 pct in July down from 58.5 pct in the previous month. Meanwhile, Asian markets this morning continued the positive trend from the US on Friday, with the Nikkei 225 index ending the morning up 166.58 points at 15,509.45 and Hong Kong's Hang Seng index 70.68 points firmer at 17,025.72 at midday. In London this morning, on the downside, HSBC opened in the red, 6 pence lower at 968, as investors cautiously awaited the bank's first-half results, where market forecasts are for pretax profit of 11.47 bln usd, up from 10.64 bln usd in the same period last year. The mining sector was also out of favour, with Xstrata, BHP Billiton and Vedanta Resources among the main fallers amid profit-taking following last week's sector strength on the back of higher commodity prices and hopes Xstrata will win its bid for Falconbridge
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Investors reacted positively on Friday to news that Inco had decided not to extend its offer for Falconbridge and this morning Goldman Sachs upgraded Xstrata to 'buy' from 'neutral' following the news while Merrill Lynch added it to its 'Europe 1' list. However, the profit-taking meant that Xstrata's shares slipped 15 pence at 2,286, BHP Billiton lost 13 pence at 1,021 and Vedanta Resources dipped 10 pence at 1,319. Elsewhere, Imperial Tobacco Group was hit by a UBS downgrade to 'neutral' from 'buy' on valuation grounds, which pushed the shares down 15 pence at 1,741 this morning. In a note to investors published this morning, the Swiss-owned broker said its rating change was primarily driven by valuation as there has been no change in the broker's earnings estimates for the tobacco group and its price target remains 1,900 pence per share. And the merger of Boots Group and Alliance Unichem was completed today, with AllianceBoots shares trading 6-1/2 pence lower 800 in early deals. Meanwhile, on the upside, Severn Trent was among the top performers, jumping 41 pence at 1,314 following a report yesterday that a group of private equity firms is considering launching a 5 bln stg takeover bid for the water company after its earlier informal approach was rejected, according to The Business. The private equity group, thought to include US firms KKR and Apollo Management, wants to acquire Severn Trent before it completes the planned IPO of its highly profitable Biffa waste business, the report said. Biffa is expected to float for around 1.5 bln stg. Severn Trent's peer, Kelda Group, added 3-1/2 pence at 839-1/2. Elsewhere, among those reporting, Pearson also got off to a strong start, 14-1/2 pence higher at 734, after the publisher said half-year profit rose by more than 400 pct, at the upper end of forecasts, helped by a return to profit at the Financial Times newspaper and a strong education market. Pearson added that it is on track to hit financial targets for 2006. In response, Merrill Lynch reiterated its 'neutral' stance on the water group and said the outperformance was in the firm's school and professional operations. Tate & Lyle, meanwhile, led the risers, 26-1/2 pence stronger at 693-1/2, after Goldman Sachs raised its EPS forecasts and valuation following the group's AGM statement on July 19.
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The US broker noted that it is lifting its 2007 and 2008 EPS estimates by 2 and 6 pct respectively and hiking its 6 month price target to 700 pence from 660. On the second line, JJB Sports enjoyed a strong start, 5 pence stronger at 185, after the FT reported that speculative investors have built up stakes in the sports retailer, hoping to profit from takeover speculation. The FT said hostile interests in JJB Sports' shareholder base include a 10 pct stake indirectly controlled by Mike Ashley, the retail entrepreneur who controls rival sports chain Sportsworld. And M&A news also boosted Northern Foods's shares, which added a penny at 85, after the food manufacturer said it has agreed to sell its NFT chilled food distribution business to a management team backed by Phoenix Equity Partners for 51.2 mln stg. Among broker changes, Rank Group climbed up 4-1/4 pence at 196 after Credit Suisse upgraded the leisure group to 'outperform' from 'neutral', saying the review of Hard Rock could unlock substantial value. The broker said the group could return over 45 pct of equity value in cash, or up to 93 pence per share if it sold Hard Rock and other non-core assets. And RPS Group's maiden session in the FTSE 250 index started positively, with the shares rising 4 pence at 222. Finally, looking to today's data, net mortgage lending is expected to have increased by 9.2 bln stg during June, just lower than May's two and a half year high of 9.3 bln. However, the picture on the unsecured lending front, via credit cards and the like, is not expected to be quite as buoyant with net consumer credit rising by only 0.8 bln stg in June, down on May's 1.2 bln increase.
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
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Frankfurt |
FRANKFURT - Market data at 9.52 am
Major indices: DAX 30 - 5,692.06, down 13.36 points or 0.23 pct MDAX - 7,851.50, up 2.30 points or 0.03 pct TecDAX - 618.49, up 4.43 points or 0.72 pct DAX future - 5,715.00, down 19.00 points or 0.33 pct
Major gainers: Altana, up 0.89 eur or 2.02 pct at 44.91, after the Financial Times Deutschland reported that Denmark's Nycomed Group is interested in acquiring the company's pharma business Commerzbank, up 0.32 eur or 1.15 pct at 28.16 Deutsche Post, up 0.19 eur or 0.98 pct at 19.48 Continental AG, up 0.73 eur or 0.93 pct at 79.33, after Credit Suisse upgraded its stance on the stock to 'outperform' from 'neutral' with a 100 eur price target Infineon, up 0.07 eur or 0.85 pct at 8.32
Major losers: E.ON, down 1.11 eur or 1.15 pct at 95.00, as Saturday's El Economista reported that the German utility giant is considering appealing to the Industry Ministry and the High Court over the conditions imposed by energy sector regulator CNE on its bid for Endesa Deutsche Telekom, down 0.13 eur or 1.06 pct at 12.14 Bayer, down 0.33 eur or 0.84 pct at 38.77 Adidas, down 0.28 eur or 0.76 pct at 36.78 BMW, down 0.28 eur or 0.69 pct at 40.01
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Paris |
PARIS - Market data at 10.27 am
Major indices: CAC-40 down 10.75 points at 5,017.76 SBF-80 up 11.23 points at 5,559.32 SBF-120 down 5.72 points at 3,623.04
Volume: 478 mln eur 11 CAC-40 stocks up 28 CAC-40 stocks down (CAC-40 currently has 39 stocks; Arcelor removed, no replacement yet)
Major gainers: Alcatel up 0.18 at 8.97 as re-rating continues, tech sector rises Pernod Ricard up 1.40 at 165.20 adding to gains late last week EADS up 0.23 at 22.18 Altran Technologies up 0.65 or 7.43 pct at 9.40 Ubisoft up 1.43 or 4.00 pct at 37.18
Major losers: Groupe Steria down 1.58 or 4.16 pct at 36.42 Publicis down 0.31 at 29.19 EDF down 0.40 at 40.38
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Amsterdam |
AMSTERDAM - Market data 10.31 am
Major indices AEX 454.54, down 1.68 points AMX Midcap 582.60, down 0.05 points Government bonds broadly lower
Major gainers ASMI soared 5.60 pct to 12.07 eur after reporting better-than-expected second-quarter earnings TNT rose 2.14 pct to 27.62 eur, after saying that it expects to sell its Logistics division in the third quarter and raising its full-year guidance on most of its core divisions Heineken added 1.84 pct to 37.60 eur Buhrmann rose 1.38 pct to 11.02 eur Pharming added 2.17 pct to 3.76 eur LogicaCMG lifted 1.20 pct to 2.53 eur Randstad rose 0.57 pct to 42.65 eur after an upgrade to 'accumulate' from 'hold' at Van Lanschot Bankiers Major losers ABN Amro fell 2.97 pct to 21.53 eur after releasing a mixed bag of second-quarter results and announcing the sale of its Bouwfonds property division to SNS Reaal and Rabobank Reed Elsevier shed 1.36 pct to 11.61X eur Wolters Kluwer lost 0.98 pct to 18.21 eur Corio dropped 1.69 pct to 52.20 eur Wereldhave lost 0.84 pct to 82.80 eur
Forex
Singapore 0711 GMT |
Tokyo 0300 GMT |
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US dollar |
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yen 114.38 |
down from |
114.48 |
sfr 1.2333 |
up from |
1.2322 |
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Euro |
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usd 1.2760 |
up from |
1.2755 |
stg 0.6843 |
up from |
0.6842 |
yen 145.84 |
down from |
146.03 |
sfr 1.5729 |
up from |
1.5720 |
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Sterling |
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usd 1.8634 |
down from |
1.8637 |
yen 213.03 |
down from |
213.36 |
sfr 2.2974 |
up from |
2.2970 |
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Australian dollar |
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usd 0.7658 |
up from |
0.7652 |
stg 0.4108 |
up from |
0.4105 |
yen 87.570 |
down from |
87.610 |
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Advfn Plc, 26 Throgmorton Street, London, EC2N 2AN +44 (0) 870 794 0236
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