European Indexes Climb

A roundup of Tuesday's action in European markets

London

The FTSE 100 closed strongly higher, helped by M&A in the beverages sector and strength in banking stocks. Additional support came from a higher open on Wall Street ahead of Alcoa's third quarter quarter figures. FOMC minutes are awaited. Oil climbed over US$80/bbl. At home, finance minister Alistair Darling said in his first PBR that the economy will grow more slowly than expected next year and Britain faced 'increased international economic uncertainty'. Darling also unveiled plans to charge 'nondoms' and increased the inheritance tax threshold. In the market, banks gained after the UK government threw a new lifeline to NORTHERN ROCK (+19.86%) by guaranteeing all new retail deposits in the mortgage lender. In big ticket M&A news, investors raised a toast as SABMILLER (+1.43%) said it will combine its US operations with Molson Coors to form a j/v. Regulators may delay a decision on whether to clear Thomson's bid for REUTERS (unch) after the European Commission ruled the deal should be subject to an in depth probe, the FT reported. In trading updates, NORTHERN FOODS (-1.92%) said it expects material costs to be 4% to 5% higher, resulting in a fiscal impact of 8% to 10%. Also, CARPETRIGHT (+4.65%) said it had received a revised £12.50/sh cash proposal from a consortium headed by chairman and CEO Lord Harris and other senior management members.

Paris

The CAC 40 (+0.38%) closed the session higher as Wall Street traded in the black at European close. Locally, SANOFI (+2.04%) gained on sustained speculation Pfizer is looking to buy a stake. GDF (+1.62%) wants to buy twice as much power from EDF (+3.08%) under a long-term contract that's under negotiation, Bloomberg said. VALLOUREC (+3.85%) moved higher on revived, if vague, bid rumour. RENAULT (+2.16%) outperformed following its addition to SocGen's Premium List. A market rumour did the rounds that MICHELIN (+1.37%) is bidding for German tyre maker Continental. However, the standout stocks were wider-market TF1 (+12.76%) and M6 (+8.25%) - in focus as the French culture minister announced last night that there will be a new TV regulation in 2008. Les Echos suggests that the 49% limit on shareholdings in terrestrial TV stations could be abolished in order for French companies to become media champions. TF1 was upgraded to outperform by Cheuvreux on the news. SOITEC (+13.56%) surged following the announcement it joined the SOI Industry Consortium. Among losers, CARREFOUR (-1.65%) suffered from an Exane downgrade to underperform. Midcap REXEL (-5.32%) is studying its options regarding Hagemeyer.

Frankfurt

Frankurt closed the session flat as intraday gains were not sustained. On the local macro data front, Germany's trade surplus slipped to a seasonally adjusted €15.3 billion in August from €16.5 billion the month before. Stock-specific, talk of Sweden's Investor AB planning a bid for MAN (+2.13%) lifted the truck maker higher. ADIDAS (+1.46%) forecasts a double digit profit increase in 2008, according to an article in FAZ. MUNICH RE (+0.59%) said it is in talks to buy a majority stake in an online car insurer unit from South Korea's Daum Communications. The stake's book value is put at some US$12 million. Alitalia has shortlisted six possible bidders, including LUFTHANSA (+1.11%). Broader market-listed KLOECKNER & CO. (-18.74%) slumped after saying it won't meet its EBITDA forecast for 2007. It will undercut the previous year's figure of €395 million by some 10%, because of missing windfall profits and lower stainless steel prices. PREMIERE took a hit in late afternoon trading on reports that Leo Kirch's Sirius is to pay DFL €3 billion for six German football seasons and will market the football broadcast rights. PRE's shares were clearly knocked by this news but one analyst said it is probably an overreaction as Sirius is simply acting as a middle man for the rights.

Nordics

All the Nordic bourses finished higher on Tuesday boosted by positive trading on Wall Street. Back in the Nordic region, TGS NOPEC (-12.