Markets & Finance

European Indexes Gain

Dealflow and earnings provided focus Thursday morning

From Standard & Poor's European MarketScope

European indexes were buoyant Thursday after a weak performance Wednesday. WTI was at US$52.11/bbl ahead of oil inventories. US futures were mixed ahead of quarterly earnings from IBM (IBM) and Merrill Lynch (ML).

UK: The FTSE 100 index traded in positive territory at mid-session helped by good commodity prices and a rebound in the oil price. Among commodities, gold touched a two-week high, while copper was firm. Nickel touched a fresh high on the LME, hit by supply issues. Locally: Kesa Electricals (+1.53%) unveiled a 7.3% rise in Christmas sales.

Misys (+5.06%) saw a fall in first half earnings, saying healthcare performance was unacceptable. The software firm said Tom Skelton has resigned as CEO of Healthcare Systems. In other news, Enterprise Inns (+3.17%) surged on a positive view by Deutsche Bank. Essar, which owns a third of Hutchison Essar, is determined to buy the remaining stake itself and does not want to partner with Vodafone (VOD) (-0.34%), The Economic Times reported.

The US Department of Health and Human Services has reportedly awarded US$132.5 million in contracts to GlaxoSmithKline (GSK) (+1.43%), Novartis (NVS) and Iomai for the production of influenza vaccines that could be used in the event of a bird flu pandemic. LSE (+0.46%), which is battling a hostile Nasdaq takeover, raised its share buyback program to £250 million. Enterprise (+1.62%) said it has rejected a £5.75/sh offer from private equity, but talks were on.

France: The CAC 40 index (+0.59%) continued to trade higher at mid-session. AGF (+1.36%) was boosted by news that Allianz (AZ) intends to take over 42.4% of the shares in AGF that it does not yet own. AGF said it welcomes the Allianz bid. The deal is reportedly worth around €10 billion.

Among those reporting, Alstom (+2.61%) posted nine months sales of €14.3 billion, +34%; third quarter sales of €3.42 billion, +15%. Accor (+1.68%) disclosed fiscal 2006 sales of €7.6 billion, +6.6%; fourth quarter sales of €1.97 billion, +7.8% like-for-like. Remy Cointreau (-1.17%) reported nine months sales of €610.5 million, +2.2% like-for-like; +0.2% on a published basis.

Vinci (+1.90%) saw sales growing 7% a year for the next three years, Chairman Yves-Thibault de Silguy told, reportedly. Areva (-0.64%) received a letter of intent from Finland's nuclear operator for a second nuclear reactor, Challenges weekly magazine reported on its web site. On the broker front, Dexia (+3.84%) jumped as Exane BNP Paribas upgraded the company to outperform from neutral, reportedly.

Germany: Breadth in the Dax index was a positive 21-9 at mid-session, as investors awaited US December CPI numbers due at 13:30 GMT. In Frankfurt, carmakers supported the index: BMW (+1.5%), DaimlerChrysler (DCX) (+1.22%), Volkswagen (+0.97%). In the news, Allianz (-0.95%) said it intends to take over 42.4% of the shares in AGF that it does not yet own and pay €87.5 in cash and an additional €0.25 Allianz shares for one AGF share. It also wants to buy 9% in Allianz Lebensversicherungs-AG.

Merck (-0.32%) reported quarterly operating profit of €303.3 million, up 58% year-over-year, topping consensus estimates. Sales rose 9% to €1.63 billion. Net income was €129.5 million. Adidas (+0.32%) has reiterated its forecasts for 2006 and 2007. It expects net profit of around €480 million to €490 million.

On the broker front, UBS upgraded Beiersdorf (+2.03%) to a buy, raising its target. In addition to the upgrade, traders mentioned that rumors are circulating that Colgate-Palmolive may be eyeing up Beiersdorf.

Other broker action: UBS raised Henkel's (+0.57%) target to €130 from €111, keeping its neutral rating, reflecting the broker's increased confidence in the company's 3%-4% sales growth target. Deutsche Boerse (+1.84%) was firmer after Citigroup raised its target on the stock.

Elsewhere: The SMI index remained higher into the afternoon session, but several more stocks have succumbed to the profit takers.

Oslo took the lead at mid-session on Thursday, rebounding from yesterday's fall. Stockholm and Copenhagen were flat, while Helsinki traded a tad lower.

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

The Good Business Issue

Sponsored Financial Commentaries

Sponsored Links

Buy a link now!

blog comments powered by Disqus