Markets & Finance

Europe and Asia Lower


European stock markets were lower on Thursday. In London, the Financial Times-Stock Exchange 100 lost 17.50 points, or 0.36%, to close at 4800.80, as Wall Street was trading lower following disappointing earnings from eBay and Qualcomm. At home, SABMiller, the world's third-largest brewer, was the worst performer in the index following reports it had emerged as the frontrunner to gain control of Grupo Empresarial Bavaria, a Colombian group, for a rumoured $9 billion. Elsewhere in the sector, Diageo announced a partnership with Heineken Russia for the production and distribution of Guinness and Kilkenny in Russia. BP dropped 0.87% following a downgrade from Morgan Stanley to equal weight from overweight while CSFB downgraded Alliance & Leicester.

In Germany, the DAX lost 25.12 points, or 0.59%, to close at 4220.43, lifted from lows but still finishing lower for the day. The session was a mixture of corporate newsflow with cost cutting and cautious optimism for earnings the main features. With the Dow trading lower, the Dax found little to release it from its torpor until Schering issued a statement saying its 2004 earnings significantly beat forecasts. Elsewhere, Infineon, SAP and Deutsche Bank paced decliners with the former lower after a negative forecast from chipmaker Qualcomm last night. DT's T-Mobile unit maintained the job reduction theme by announcing it may cut as many as 2,200 as it attempts to lower costs this year by 1 billion euro. Bucking today's negative trend, but not to be outdone on the jobs news, VW said it plans to cut up to 4,000 staff as part of its ForMotion cost-saving programme. Siemens has finally caved in to pressure from VA Tech shareholders to lift its bid. The new offer is 65 euro, vs. the previous 55 euro.

France's CAC-40 lost 26.57 points, or 0.69%, to close at 3842.44. French stocks ended lower as Wall Street was weaker, weighed down by disappointing results and outlook statements from eBay and Qualcomm, released overnight. Higher-than-expected December leading indicators did little to enthuse buyers. The Qualcomm/eBay reports hit French technology and consumer electronics stocks: Thomson, STM, and Alcatel. French corporate newsflow also called for caution, with disappointing fiscal 2004 EBITA guidance from LVMH weighing heavily on the stock. The luxury group posted in-line fiscal 2004 results, thanks to strength at Louis Vuitton during the fourth quarter, but it sees 10% growth in fiscal 2004 operating profit, lower than the 13% growth analysts were expecting. Defensives offered some refuge. Suez was amongst a handful of CAC40 gainers after an upgrade from CSFB and news it may sell its stake in Aguas Argentinas. La Tribune reported the game maker has approached Take-Two Interactive Software and Activision of the U.S. in a bid to fight attempts by Electronic Arts to take it over.

Asian markets were lower on Thursday. In Japan, the Nikkei 225 lost 120.57 points, or 1.06%, to close at 11,284.77, it's lowest close since Dec. 22, on dampened sentiment following disappointing earnings from U.S. firms. Tech stocks fell, with Advantest sliding 0.92% while Sony Corp edge down 1%. Sony Corp. cut its operating profit estimate for this business year by 31% to 110 billion yen, citing a worsening business climate in the electronics sector. Regional banks such as Shizuoka Bank rose after Goldman Sachs upgraded its view on the regional bank sector. Softbank Investment rose 0.77% after the company reported a 10-fold jump in third quarter profit.

In Hong Kong, the benchmark Hang Seng Index slid 135.04 points, or 0.99%, to close at 13,543.59, weighed down by losses in U.S. stocks overnight. Li & Fung fell on concerns about U.S. economy outlook, which is the company's major export market. But China Unicom rose after the telecom operator said it added 1.53 million new subscribers in December. PCCW shares were suspended today. China Network Communications said it has agreed to pay $1 billion for 20% of PCCW.

Canada's benchmark TSX/S&P lost 31.37 points, or 0.34%, to close at 9,088.98.


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