European Indexes End Mixed

A rundown of Tuesday's action in major European stock markets

by S&P MarketScope Europe Staff

London

The FTSE 100 closed flat as banking stocks offset solid performances by mining stocks. Banks fell after Merrill Lynch announced that it would take more write-downs in 3Q and raise US$8.5bn in equity. At home, BP (-2.45%) reported better-than-expected 2Q profits. However, oil stocks were under pressure as WTI fell by over US$3/bbl towards the European close. BA (+5.97%) took off after announcing merger talks with Iberia. BARCLAYS (-4.13%) has been sued for EUR 170m (GBP134m) by a bank in San Marino over an investment in highly geared credit securities. RDS (-1.82%) shelved sale of lubricant group Infineum after failing to obtain the asking price. VEDANTA (+2.0%) said 1Q EBITDA rose to US$739m. KAZAKHMYS (+0.95%) raised its stake in ENRC (+2.83%) to 22.24%. UBM (-2.13%) published 1H figures ahead of forecast and said it is on track for another good FY performance. WOLFSON (-3.69%) reported 2Q revenue in line with guidance, and announced a share buyback of up to 10% of the issued capital. ST JAMES'S PLACE (-2.15%) posted a 3% increase in new business APE in 1H and said if current market conditions continue, growth in 2H will be broadly similar to 1H. WOOLWORTHS (-14.48%) sank as latest Retail LFL sales fell 6.7%. INCHCAPE (-12.51%) retreated after cutting profit forecasts. GAMES WORKSHOP (-8.06%) narrowed FY EPS losses to 2.4p vs 11.2p. BODYCOTE (+1.63%) said 1H revenue rose 20.5% y/y to GBP382.6m.

Paris

The CAC 40 (-0.09%) closed flat, well off intra-day lows, with Wall Street trading firmly in the black following solid consumer confidence data and falling WTI, which stands at US$121.25/bbl. Locally, Merrill Lynch's write-down and capital increase announcement yesterday weighed on banks: BNP PARIBAS (-1.76%), SOCGEN (-3.39%), CREDIT AGRICOLE (-2.25%). Elsewhere, ALCATEL LUCENT (+2.09%) reported 2Q net loss of EUR 1.102bn vs consensus of EUR 135m. CEO Patricia Russo and Chairman Serge Tchuruk will step down by the end of the year. ARCELOR MITTAL (+4.57%) climbed ahead of 2Q results tomorrow, buoyed by record 2Q profit at US Steel. GDF SUEZ (+0.84%) has invited Gas Natural to launch a joint bid for Union Fenosa, Expansion wrote. Separately, France's energy regulator has proposed that GDF Suez's GRTgaz unit should be allowed to raise tariffs for third-party access to the country's natural-gas network by 6% from next year. Fitch has cut SAINT GOBAIN's (-0.94%) long-term Issuer Default and senior unsecured ratings one level to 'BBB+' from 'A-'. KLEPIERRE (-11.04%) unveiled 1H EPS down 17.8% y/y and announced the EUR 2.7bn joint-buyout of Scandinavia's leading shopping centre player Steen & Strom with Dutch pension fund ABP. SocGen downgraded to hold from buy. ATOS (+3.37%) posted 1H net sales of EUR 125m vs. consensus of EUR 57.5m. Raised guidance for FY sales growth to above 5%.

Frankfurt

Xetra-Dax (+0.75%) recovered from earlier losses to close higher, while Wall Street was also higher amid falling oil prices and some strong earnings reports from Colgate-Palmolive and US Steel. THYSSENKRUPP (+2.93%) rose after the better-than-expected results from US Steel. Financials came off earlier lows but still closed amid the weaker performing sectors. In earnings, SAP (+9.75%) reported 2Q total sales of EUR 2.86bn, software-related services revenues of EUR 2.06bn and EBIT of EUR 593m - all higher than expected. SYMRISE (-6.48%) posted 2Q EBIT of EUR 53.6m, lower than expected. The flavours and fragrances group trimmed its profit growth outlook. IDS SCHEER's (+8.15%) 2Q EBITA came in ahead of forecast at EUR 7.7m. The software and consulting company confirmed its full-year targets. Biotech group MORPHOSYS (+1.82%) saw its 2Q net income come in at EUR 3.03m, up 116% y/y. Beverages machinery engineer KRONES (-6.50%), under pressure on profit taking after a good run so far this year, tabled 1H PTP of EUR 91.8m. PFEIFFER VACUUM (-0.45%) reported 1H EBIT of EUR 24.8m, but was under the cosh on fear of sliding margins ahead. SALZGITTER (+2.00%), on the other hand, was well bid after saying it may have to guide for higher 2008 PTP.

Spain

The Ibex 35 gained further ground in afternoon trade to end broadly stronger, with IBERIA flying high on merger news. Lower oil prices also provide a boost, with WTI dipping to US$121.45/bbl. Wall Street was also trading higher following better-than-expected consumer confidence data. Results were in focus locally as SANTANDER's (+2.33%) 1H numbers topped forecasts, with NII of EUR 8.49bn, up 14.5% y/y. Santander added that group NPL ratio is 1.34% vs 0.83% y/y. ENAGAS (+0.59%) delivered 1H EBITDA of EUR 317m, up 6.3% y/y but a shade below consensus estimates. GAMESA's (+6.37%) 1H numbers beat expectations with net profit up 69% to EUR 93m. GAS NATURAL (-1.08%) posted 1H EBITDA up 15.1% y/y to EUR 1.297bn, in line with estimates. Meanwhile, in M&A news, GDF Suez has invited Gas Natural to launch a joint bid for UNION FENOSA (+5.35%), Expansion reports. IBERIA (+20.73%) and British Airways are in talks over an all-share merger. Finally, REYAL URBIS (-1.21%) has sold property developments to a unit of BANESTO (-0.31%) for EUR 312m plus a variable amount of up to EUR 69m.

Zurich

Swiss stocks ended Tuesday's session mixed, with the SPI up 0.28% and the SLI down 0.29%. Meanwhile, Wall Street traded higher on the heels of good consumer sentiment data for July. Locally, UBS (-3.62%) ended lower as sentiment on financials was weak due to a Merrill Lynch announcement that the latter faces write-downs in 3Q and has to raise US$8.5bn in equity. CLARIANT (-2.59%) also closed down on profit taking following 2Q figures in line with expectations. EFG INTERNATIONAL (-2.62%) closed in the red after saying it may miss its medium-term CHF800m-CHF900m profit target due to deteriorating market conditions. The company today released solid 1H figures. ASCOM (-2.28%) named Martin Zwyssig new CFO as of 1 September. On the upside: Migros is set to double its stake in CHARLES VOEGELE (+2.05%), according to CASH Daily. ALSO (+1.15%) cut its FY08 net income forecast to CHF15m-CHF17m vs the previously announced CHF30m. ABB (+0.29%) booked a US$113m-worth smelter order in India.

This content is written by S&P MarketScope Europe (EMS), an equity newswire. Reporters are: Pawan Girglani, Emma Gonzalez, Julien Manrique, Sara Oscarsson, Rocio Opazo-Aniotz, Gaurav Panchal, Claudia Perotti, Michael Sanderson, Emma Stevenson, John West, Isabell Witt .