Markets & Finance

European Indexes Mixed


The approaching Christmas holiday didn't cheer up European indexes Thursday

From Standard & Poor's European MarketScope

European indexes closed mixed. Wall Street was flat at the continental close, weighed down by GDP data showing a 2.0% expansion in the third quarter vs. the 2.2% estimated last month.

UK: The FTSE 100 index ended a dull session slightly lower, with almost as many gainers as fallers. In the FTSE, higher banks were unable to offset the pressure from falling miners and Vodafone (VOD) (-1.97%), which was hit by the prospect of a possible US$13 billion move on India's Hutchison Essar. Miners fell as copper prices hit a five-weak low, while steel was dented by news of lower growth in Chinese iron ore imports next year: Rio (RTP)(-0.99%).

Amongst gainers, Smith & Nephew (+3.37%) was the runaway leader as The Business reported that the buyers of its US rival Biomet are now lining up a bid for the UK group. Ryanair's (+0.20%) takeover bid for Aer Lingus lapsed after European competition authorities decided to probe the deal further. Still, Ryanair said it remains committed to the link-up if the deal were cleared by the authorities.

Arriva (-0.68%) may buy a stake in Hanover's rail operator, according to FTD. On the earnings front, Persimmon (-0.46%) delivered a strong trading update, reiterating that this year is likely to bring record profits. Tullow Oil (+0.76%) announced first oil from Okume Complex in Equatorial Guinea and the acquisition of a package of interests from the Gabonese government. Carnival (+2.84%) rose after posting better-than-expected fourth quarter EPS of US$0.51.

France: The CAC 40 (-0.07%) ended Thursday's session a shade lower as Wall Street was trading flat in the absence of a major catalyst to encourage the main indices to take a direction. Oil prices continue to fall, with the February contract down 1.68% at US$62.65/bbl. The market awaits today's Philly Fed data and testimony from the Richmond Fed President to shed some more light on economic growth. Of local note, Sanofi (-0.29%) is interested in buying a biotech should one be available, CEO Jean-Francois Dehecq told La Tribune, naming Genentech (DNA) as an example.

Suez (SZE) (+2.06%) tucked a number of important deals under its belt, and merger speculation continued. This time, Francois Pinault, reference shareholder of Suez, was said to be considering a new break-up plan for the energy group, where he would launch a bid for Suez with the approval of GDF, sell the energy activities to GDF and keep the water and environmental units.

Cap Gemini (+2.29%) benefited from Accenture's stronger-than-expected first quarter06/07 numbers and improved guidance. In the broader market, Bull (+29.81%) stampeded after selling its entire stake in Bull Italia to Eunics. Publicis (+5.08%) rallied after buying US-based interactive agency Digitas for US$1.3 billion, in a move welcomed by UBS. Nexans (+4.60%) jumped after signing a €65 million frame agreement contract in the US. Areva (-1.32%) fell after cutting its fiscal year operating profit estimate.

Germany: The Xetra-Dax index (-0.06%) hovered around breakeven at mid-session Thursday after US stocks edged lower on Wednesday. Key for Adidas (-0.98%), arch rival Nike's (NKE) fiscal second quarter net earnings rose a better-than-expected 8% to US$325.6 million, helped by a tax benefit. The world's No. 1 sports shoe maker saw quarterly revenues rise 10% to US$3.82 billion.

Metro's (-0.45%) CEO, Hans-Joachim Koerber, told Sueddeutsche Zeitung that there is no reason for euphoria over this year's Christmas sales, showing more caution than the German retail lobby, which forecasted a 2% year-over-year increase. BASF (BF) (+0.25%) expects a robust 2007 for the chemicals sector, including itself, CEO Juergen Hambrecht was quoted as saying in the FAZ.

The EU has approved MAN's (+0.91%) bid for Sweden's Scania, with MAN saying it is confident that its bid will succeed, adding that an extension of the offer period beyond Jan. 31, 2007, isn't planned. In fact, MAN plans no changes to its offer at all. A US judge reportedly dismissed claims made by Spain's Gas Natural that E.On (EON) (-0.18%) filed a misleading preliminary tender offer with US regulators in the takeover battle for Spanish utility Endesa.

BMW (-0.44%) plans to buy back up to 800,000 shares, starting Jan. 2, 2007. The stock is to be distributed among employees. Custodia Holding is mulling the sale of its 25% stake in Hochtief (+1.1%). Encouraging results for Endotag-1 provided some lift for Medigene (+5.23%).

Elsewhere: The SMI index (+0.05%) was little changed at the end of Thursday's session. Piazza Affari closed Thursday's pre-festive trading session below the gain line.

Alexander Wisch, Rocio Opazo-Aniotz, Claudia Perotti, Michael Sanderson, Emma Stevenson, Mariella Mongio, Pawan Girglani, Guarav Panchal, Julien Manrique, Isabell Witt, Sara Oscarsson, Ben Marino, John West

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