European Indexes Finish in the Red

A roundup of Thursday's action in major European markets

London

The FTSE 100 closed sharply lower as Wall Street traded in the red after Bank of America's disappointing quarterly results. Financial stocks at home felt the heat. Chancellor Alistair Darling told the Daily Mail that the NORTHERN ROCK (-1.81%) takeover must be swift. Activist investor Knight Vinke, who is seeking reform in HSBC (-2.28%), has reportedly found support from shareholder New Star Asset Management. Energy and retail stocks weighed too; the latter being under pressure following DSG INTERNATIONAL's (-8.90%) first half trading update. DSG says latest like-for-like sales rose 5%, but its Italy performance remained disappointing. The brokers were unimpressed. Real estate stocks took a beating after the IMF warned that UK house market was in danger of a slump. Also, Cazenove downgraded the UK Real Estate sector to underperform. The broker also cut BRITISH LAND (-0.47%) and LAND SECURITIES (-2.42%) to in line. WTI climbed to US$88.74. In the M&A arena, BRITISH AIRWAYS (+1.47%) is looking at merger plans that could create a transatlantic super-carrier and is in talks with bmi's controlling shareholder Michael Bishop, The Times wrote. In broker action, RANK (-2.26%) suffered a downgrade at HSBC to neutral from overweight as well as a target cut.

Paris

Negative trading on Wall Street saw the CAC 40 (-0.89%) end deep in the red, along with many other European bourses. Poor third quarter figures from Bank of America weigh across the pond. Locally, TOTAL (-1.37%) was the biggest drag as JP Morgan cut its target price, arguing integrated oils may struggle to outperform. LAGARDERE (+2.22%) refuted French magazine Le Nouvel Observateur's report that it could delist its shares from Euronext. DANONE (+1.53%) CEO Franck Riboud told Les Echos that the food producer expects fourth quarter sales from its China j/v to drop further after falling 30% in third quarter. THOMSON (-0.67%) reported total third quarter07 revenues of €1.375 billion vs €1.435 billion in third quarter06 and €1.450 billion consensus. According to Airbus, India's national carrier, Air India, is considering buying 10 EADS (-1.37%) Airbus A380s and another eight to 10 as options, Business Standard reports. Alitalia is expected to tell Italy's economy minister in mid-November which potential buyer would be best for the airline's interests. The short-list of potential buyers includes AIR France
-KLM (-1.0%) and Lufthansa. In the broader market, VALEO (-3.92%) reported third quarter07 total operating revenues of €2.245 billion, +4.3% year-over-year, and a net loss of €40 million vs a €7 million profit in third quarter06. Exane downgraded TECHNIP (-4.19%) to underperform from outperform.

Frankfurt

The Xetra-Dax (-0.8%) ended firmly lower, as Wall Street traded in the red after an earnings miss at Bank of America. However, MAN (+2.31%) was well bid on M&A news. Swedish newspaper Dagens Industri reported that VW (+0.86%) and the Wallenberg family, both major owners of Scania, reached an agreement for the Swedish truck maker to bid for MAN. On the earnings front, SAP's (-3.31%) third quarter software revenues met expectations, coming in 11% higher year-over-year at €715 million. Disappointing for some, fiscal guidance was merely maintained. Concerns about DEUTSCHE POST's (-2.64%) third quarter results have come to the fore as some traders fear core earnings may come in on the soft side. UNITED INTERNET (-2.48%) will not bid for FREENET (-4.79%) this year, according to Boersen-Zeitung. GEA (+1.72%) currently has no plans for any large acquisitions, its CEO Juerg Oleas told the same newspaper. GERRESHEIMER (-1.57%) may sell its unit that supplies plastics to the automobile industry in 2008, reports the FTD. PFLEIDERER (+1.