European Indexes Finish Mixed

A roundup of Monday's action in European stock markets

London

The FTSE 100 closed flat tracking a weak Wall Street. Fading credit woes and a cooling oil price - at US$79.14/bbl - gave little support at the close. At home, banks and retail sectors led, but were offset by falling energy stocks. Financials gained after Alan Greenspan said the credit crisis could be coming to an end. Further, BARCLAYS (+3.58%) rose on hopes that it will lose the bid battle for ABN Amro to the ROYAL BANK OF SCOTLAND (+3.72%) consortium. A positive note by Citigroup helped insurers, with the broker reiterating buy on LEGAL & GENERAL (+0.59%). NORTHERN ROCK (+2.20%) was higher in volatile trade on talk of a rescue package at £1.75/sh. In earnings, TESCO (+6.54%) dished out an in-line 14.3% rise in first half underlying pretax profit. The retailer added that first half UK
like-for-like sales ex-fuel rose 3.5%, with August UK
like-for-like sales growth picking up 5%. MORRISON (+1.67%) chalked up gains. Utility SEVERN TRENT (-0.78%) said first half trading is in line, but wet weather conditions would hit fiscal revenues - predicting top line to be about £12 million, lower than expected. In a blow to BSKYB (+0.51%), the Competition Commission said the pay-TV company's 17.9% stake in ITV (+4.64%) restricted competition. The Commission added it will consult on possible remedies, including possible divestment of the shareholding.

Paris

The CAC 40 (+0.62%) closed the session in positive territory, though off intraday highs as Wall Street trades lower. Of local note, banking stocks were the main support to the index: SOCGEN (+4.09%), BNP PARIBAS (+2.50%), CREDIT AGRICOLE (+1.79%) added 23 points. Italian newspaper MF reported that AIR France
-KLM (+2.04%) is prepared to acquire Alitalia - but not at any price. VINCI's (+0.88%) CEO told Les Echos that Vinci's growth and orders have never been as high as currently. AIR LIQUIDE (-1.77%) bought respiratory homecare unit of Allied Healthcare for €51 million in cash. Les Echos reported that about 80% of the 5,000 French customers who switched to a new electricity supplier since 1 October went to GDF (-1.00%). ALSTOM (-0.20%) offered to buy back 6.25% March 2010 bonds to reduce debt, reportedly. In the broader market, NORBERT DENTRESSANGLE (+2.44%) acquired UK
's Christian Salvesen at a price of £0.92/share, valuing Christian Salvesen at approximately £254.4 million (€365.1 million). In broker news, Morgan Stanley reiterated its overweight stance on CAP GEMINI (+2.87%); SocGen downgraded GEODIS (-1.91%) to sell from buy and reiterates buy on EULER HERMES (+3.38%).

Frankfurt

Xetra-Dax (+0.31%) closed slightly higher, but off earlier peaks as Wall Street turned lower after much worse-than-expected US pending home sales. Financials DEUTSCHE BANK (+2.57%), COMMERZBANK (+2.0%) and ALLIANZ (+0.89%) were well bid today as a number of market participants believe global credit crunch woes are over - not a belief shared by all. DEUTSCHE BOERSE (+1.61%) also supported the index as it reported trading rose 45% year-over-year to €194.1 billion in September. MAN (+4.38%) closed as leading riser on the Dax on rumours of a €120/sh - €125/sh bid from VW (-1.2%), traders said. In other news, INFINEON's (-0.92%) Qimonda unit and Sony plan to set up a j/v to design DRAM memory chips. BEIERSDORF (+0.76%) agreed to buy 85% of Chinese hair care group C-BONS for €269.45 million. There was market talk of TUI (unch) CEO Frenzel resigning, forced out by US activist investor Guy Wyser-Pratte. However, TUI dismissed the talk. K+S (+6.53%) said its 2007 earnings will be at the lower end of its €310-325 million forecast as it adjusts its currency hedges because of a strong euro compared to the US$. But a positive trajectory of potash prices keeps the market optimistic. GRENKE LEASING (+13.63%) lifted its guidance as third quarter prelims topped estimates. German politicians hinted at changing tax laws that may support the biofuel sector, thus buoying the likes of CROPENERGIES (+13.11%).