Markets & Finance

Europe Closes Higher


European stock markets were higher Friday. In London, the Financial Times Stock Exchange 100 gained 11.50 points, or 0.24%, to close at 4801.70. The FTSE closed higher, but retreated from intra-day highs after weak U.S. consumer confidence data added to yesterday's jitters following disappointing GDP data. Wall Street was still trading higher following a strong third-quarter from Microsoft and in-line core PCE data. Locally, metals & mining and oil and gas stocks lent support. WTI traded at $51.20 per barrel after slipping below $50 per barrel yesterday: Shell and BP benefited 0.64% and 0.28% respectively. Drug stocks fell after yesterday's gains, with Shire Pharma reporting a 35% drop in adjusted earnings per share to 11 cents. A series of broker upgrades and target price hikes failed to boost Glaxo and AstraZeneca. Publisher Pearson said it is trading in line with expectations. Beverages groups slid following weak first-quarter results this week from Anheuser-Busch and InBev and a note from Goldman Sachs warning Western European beer volumes are falling.

In Germany, the Dax gained 6.74 points, or 0.16%, to close at 4184.84. Frankfurt closed off intraday highs back below the 4,200 level after a relatively quiet trading session dominated by positive results from Bayer and a technical bounce by auto stocks. Bayer was today's strongest performer after it said first-quarter net income rose 56% to 652 million euro, vs. 419 million euro, while sales from continuing operations up 16% to 7.7 billion euro year-over-year. Thyssen bounced on rumours its results due on May 13 may show a record EBIT result from its steel division. VW gained as dealers drew some encouragement from VW Brand Group's results, which showed losses narrowed in first-quarter. DaimlerChrysler benefited from several broker amendments to either the target price or earnings per share forecasts. Deutsche Bank slipped in the last hour of trading after dealers reported UK hedge funds offloading the stock following today's more detailed report. The bank said first-quarter trading profit rose 18% to 2.41 billion euro, which was the highest level since first-quarter 2001. Total revenues rose 7% to 6.52 billion euro. BASF, Munich Re, and T-Online traded ex-dividend.

France's CAC 40 gained 0.26 points, or 0.01%, to close at 3911.71. The CAC40 ended near flat as the benchmark had a change of heart on Friday. A firm opening on Wall Street encouraged investors somewhat, but the mood shifted as the Nasdaq took a turn for the worse. Microsoft edged off highs, despite delivering solid quarterly figures and a revised outlook, as a weaker-than-expected consumer confidence reading stoked concerns about economic growth. The Dow was up 0.09% and the Nasdaq slipped 0.42%. In Paris, Cap Gemini remained the CAC40's top performer after an upgrade from Morgan Stanley, while Arcelor was firm on the day of its AGM. First-quarter sales at PSA came in a shade below consensus, but some brokers focused on the positive underlying tone of the statement. Brokers adjusted their targets and recommendations on Alcatel - with mixed outcomes.

Asian markets were lower on Friday. In Japan, the Nikkei 225 was closed for Greenery Day.

In Hong Kong, The Hang Seng Index was down 0.45 points to close at 13,908.97. Oil giant Sinopec fell 1.61% to $3.05 (Hong Kong) following the release of firm's first-quarter net profit, which was in line with S&P Equity Research's expectations, making up 22% of our full year 2005 net profit forecast of 43,987 million yuan. China Unicom inched down 0.79% to $6.3 (Hong Kong), after the mobile carrier reported a 26% year-over-year fall in first-quarter net profit to 1.06 billion yuan. China Eastern Airline turned positive and rose 2.8% to $1.47 (Hong Kong) on a technical rebound, despite the carrier saying first-quarter net profit plunged 73% year-over-year to 50 million yuan mainly due to high jet fuel prices offsetting the robust revenue growth.

Canada's benchmark TSX/S&P gained 94.20 points, or 1.02%, to close at 9,369.30.


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