Markets & Finance

Europe Closes Higher, Asia Mixed


European stock markets closed higher on Thursday. In London, the Financial Times-Stock Exchange 100 gained 42.40 points, or 0.90%, to close at 4776.90, a 29-month high. Investors took a liking to results from telco giant BT and BG Group. BT reported a 4% rise in second-quarter profits to 549 million pounds, vs. 528 million pounds year-over-year, and said the 36% growth in new wave revenues to 1.033 billion pounds helped deliver its best underlying revenue growth in almost three years. BG was in line with forecasts, with a 34% rise in third-quarter net profit to 215 million pounds from 161 million pounds. Royal & Sun Alliance took a hit with the market rattled by comments RSA made about the potential for some future adverse claims developments, which will be assessed during the fourth quarter. The Bank of Ireland said first-half of the year profits are up 5% to 676 million euro from 642 million euro, in line with expectations, but noted its asset management division was facing a challenge with assets under management falling 3% to 56 billion euro. Invensys reported second-quarter operating profit at 47 million pounds, slightly ahead of forecasts, and reiterated trading was in line with expectations. Prudential this morning said its controversial 1 billion pound rights issue had a take-up rate of 92%. While following the launch of its 3G strategy yesterday, Vodafone moved up 1.45%.

Germany's benchmark DAX gained 41.68 points, or 0.59%, to close at 4130.81, helped by earnings news from such luminaries as Deutsche Telekom, BASF, Lufthansa and E.ON. Deutsche Telekom was the focus after reporting better-than-expected numbers. The group raised guidance but investors were concentrating on margins in its German T-Mobile division, which some investors had speculated would come in below guidance. Siemens' numbers were not as bad as many investors had feared although the stock was down 0.41%. The group blamed a fourth-quarter loss at its mobile phone unit for the result. MAN AG gained 1.15%, after its numbers came in in-line, with the stock higher after the group upped guidance.

In France, the CAC-40 gained 48.88 points, or 1.29%, to close at 3833.79. The CAC40 closed at a multi-year-high, but was off the intra-day peak as Wall Street traded higher on sliding oil prices. Trading in Paris was subdued as many domestic players were off for a public holiday. Total was 1.27% higher, as analysts were mostly positive following yesterday's robust third-quarter performance. SocGen benefited from fairly healthy third-quarter net profit figures, thanks to a write-back of provisions in CIB. However, the French banking retail business remains a poor performer. AXA rose 2.13% on upbeat broker comments post third-quarter numbers. Alcatel was lifted 2.17% by an S&P Ratings upgrade of its long-term corporate credit and senior unsecured debt ratings to 'BB' from 'BB-'. Atos Origin suffered as it reported in-line third-quarter revenues but working capital disappointed. Results aside, EADS surged 5.69% on the back of talk of a new $2 billion order from Indian Airlines. Sanofi-Aventis benefited as the the WHO prepares a plan to vaccinate the world's population against a bird flu pandemic.

Asian markets ended mostly lower on Thursday, with Japan's Nikkei average sinking 1.35% on poor machinery orders data. The Japanese benchmark lost 148.04 points, to close at 10,846.92. Japanese stocks slid after core machinery orders fell 1.9% month-over-month in September, which was worse than analysts' expectations. Banks and exporters fell on the news, with Mizuho Trust skidding 0.56% while Toyota Motor edged down 0.49%. Tokyo Electron dropped 2.52% after the company cut its half-year net profit estimate because of higher taxes, but maintained its full-year forecasts.

In Hong Kong, the benchmark Hang Seng Index lost 47.86 points, or 0.35%, to close at 13,624.51. Fashion retailer Esprit plummeted on news its chairman was selling 97.27 million existing shares at a discount of between 2.9% to 6.03% to yesterday's closing price.

Canada's benchmark TSX/S&P gained 44.50 points, or 0.50%, to close at 8,886.17.


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