European Indexes End Mostly Lower

A rundown of Thursday's action on major European stock exchanges

by S&P MarketScope Europe Staff

LONDON

The FTSE 100 closed flat as resource stocks notched up gains on a rise in crude price offsetting weak banking stocks. Wall Street was trading in the red on credit fears and rise in oil. Crude prices surge above US$121 on supply concerns. At home, retailers stayed subdued despite a better than expected retail sales report for July. ENRC (+2.82%) reported solid interims with revenue up 86% and said it expects higher commodity prices to hold despite macroeconomic uncertainties and anticipates a very strong performance in 2H08. HOCHSCHILD's (+0.49%) 1H revenue jumped 92% to US$231.8m. XSTRATA (+4.79%) was seen as losing out in the battle for control of Australia's Indophil as Stanhill Resources improved its offer and won board recommendation. ONGC has been given the go-ahead to bid for IMPERIAL ENERGY (+5.58%), according to the Indian press. PERSIMMON (+14.9%) rallied despite posting a slump in 1H profits to GBP100m, down from GBP281.1m in 1H07 and slashing its dividend. Brokers said numbers were at the top end of the range. SIG (+3.78%) reported 1H sales up 35.9%, and issues a confident outlook. Cinven dropped out of auction for ELAN's (-2.43%) EDT.

PARIS

The CAC 40 (-1.4%) closed firmly in the red as Wall Street traded in negative territory. Concerns persisted over financials, as Citigroup analysts reportedly said that Lehman, Goldman and Morgan Stanley could incur further write-downs - BNP (-2.72%), SOC GEN (-1.46%) and CREDIT AGRICOLE (-2.62%) fell. WTI gained further on supply concerns, now trading at US$121.34/bbl. Elsewhere, traders said speculation did the rounds that EDF (-1.35%) is preparing a bid for RWE. LAFARGE (-2.95%) stumbled as Holcim's 1H earnings missed expectations. STM (+0.83%) was still buoyed by its newly unveiled j/v with Ericsson. ARCELOR MITTAL (+1.41%) was negotiating to take a 'significant' stake in Thailand's No.2 hot-rolled steelmaker G Steel P, Bloomberg reported, citing news paper Krungthep Turakij. In broker action, ACCOR (-0.85%) saw Lehman Brothers cut its target to EUR 57 from EUR 60, factoring in a more cautious RevPAR outlook in 2009. Kept overweight. In the wider market, JP Morgan cut its target on HAVAS (+0.42%) to EUR 2.00 from EUR 2.75, keeps neutral, seeing FY08 organic growth nearly halved to 4%. Finally, GEMALTO (+11.94%) climbed after lifting its 2008 EBIT target following higher-than-expected 1H operating income of EUR 69m.

FRANKFURT

Xetra-Dax (-1.28%) closed deep in the red as renewed concerns about the global financial sector weighed. Furthermore, crude topped US$121/bbl, weighing on auto and airline stocks: BMW (-3.38%), LUFTHANSA (-2.54%). MLP (1.60%) was in focus late in the session after it announced a capital increase, seen as a move to secure its independent model. Also late in the session, Manager Magazin reported that major shareholders of HOCHTIEF (-0.28%) are planning to split the company. Another report from the same publication said that DAIMLER (-0.51%) is considering spinning off its commercial vehicles unit. It has, since, refuted this notion. Elsewhere, US private equity group Lone Star is to take a 90.8% stake in IKB (+7.84%). It has asked the German financial watchdog for permission not to make a bid for the rest of the troubled bank's shares. Ball bearings group Schaeffler has agreed to limit itself to a minority stake of 49.99% in CONTINENTAL (+0.42%), raising its offer to EUR 75 per share, ending a hostile takeover approach. The tyre maker's shareholders have until 16 September to take up the offer. Market rumours circulated that France's EdF wants to sell its stake in ENBW to be free to prepare an offer for RWE (+0.21%). Wind turbine group NORDEX (+5.09%) impressed with results, while ARQUES (-10.13%) sees its FY08 EBITDA coming in flat.

NORDICS

Oil-heavy Oslo outperformed the rest of the Nordic benchmark indices on Thursday, while Wall Street fell amid fears of more credit losses in the financial sector. Meanwhile, WTI jumps to US$121.30/bbl, raising concerns about consumer spending. Locally SAS (-3.89%) continued to suffer from yesterday's fall when a Spanair MD-82 plane crashed at the Madrid Barajas Airport killing 153 people.