Markets & Finance

European Indexes Gain


News Corp.'s bid for Dow Jones spurred several European indexes higher Wednesday

From Standard & Poor's European MarketScope

Major European indexes saw gains Wednesday morning. Crude was at US$64.16 a barrel ahead of EIA data today. Wall Street was set to open higher on M&A activity.

The FTSE 100 index continued to stay in positive territory as the mining and energy sectors stayed firm. In London, media stocks were in focus after News Corp.'s (NWS) unsolicited US$5 billion bid for Dow Jones (DJ) was rejected. Investors subscribed to ITV (+0.75%). Also, the Murdoch-controlled BSkyB (+4.53%) said its revenues in the first 9 months rose 10%, with new customer additions up 25%.

In further company news, Lonmin (+6.75%) said its first half pretax profit rose 63%. The South Africa-focused miner maintained its fiscal guidance. Pharmacy chain Alliance Boots (+0.04%) posted a 7.4% rise in fiscal trading profit. Services group Rentokil Initial (+0.14%) unveiled a 23.2% in first quarter adjusted pretax profit. Housebuilder Taylor Woodrow (-0.21%) said the outlook is in line with expectations.

In M&A news, grocer Morrison (+1.29%) saw shares rise on a private equity bid report. Meggitt (+4.07%) shares surged on talk of Swiss firm Sulzer being interested. In broker action: Liberty International (+2.04%) was in demand after Credit Suisse upgraded the property company following strong first quarter results. GlaxoSmithKline (GSK) (-0.48%) and Whitbread (-0.32%) traded ex-dividend.

Germany: The Xetra-Dax index (+0.37%) remained well bid at mid-session. Of local note, Deutsche Boerse (-2.23%) is buying the US options exchange ISE for US$2.8 billion. On the earnings front, Allianz's (AZ) (+0.73%) first quarter prelims topped expectations, with operating profit rising to some €2.9 billion from €2.7 billion a year ago. Quarterly net income was €3.2 billion, up from €1.8 billion last time, helped by gains from capital investments of about €2 billion in the quarter.

Henkel's (+2.77%) first quarter EBIT also topped expectations, coming in 9.2% higher year-over-year at €323 million, with quarterly sales up 6.2% year-over-year to €3.24 billion, also ahead of estimates. Continental (+3.67%) reported first quarter net profit up 22% year-over-year to €270.5 million after minorities on quarterly sales 9.8% higher at €3.96 billion.

FMC (FMS) (-0.6%) reported a 50% rise in first quarter operating profit to US$365 million, helped by its acquisition of Renal Care and higher treatment prices. Leoni (-1.09%) posted first quarter EBIT of €34 million, a touch better than expected, on quarterly sales of €586.5 million.

Depfa's (-2.13%) first quarter net income was below expectations at €123 million. In the auto sector, DCX's (DCX) (-0.27%) US vehicle sales rose 1% in April. VW's (-0.49%) US sales slid 7% in the month, despite Audi sales rising 9.4%. BMW's (+0.82%) group vehicle sales in the US were up 0.5%. Porsche's (+2.49%) North American sales fell 10% in April.

France: The CAC 40 index (+0.31%) remained in positive territory. Lagardere (+2.23%) rose on reports that Dow Jones' controlling shareholder has rebuffed the News Corp bid, spurring speculation that News Corp might increase its offer. A UK labor union has said that Michelin (+0.72%) is 'slashing' the pensions of 4,200 employees, Bloomberg reported. The company said Michelin plans to close a fund and give employees worse options.

Among those reporting, M6 (+0.34%) posted first quarter sales of €338.6 million, up 9.7%. Imerys (+3.8%) posted first quarter underlying net profit up 5.6% to €68.3 million. SES Global (+3.19%) reported first quarter revenues of €399.5 million, up 21%. Gameloft (+4.55%) posted first quarter sales of €22.7 million, up 54%, and raised fiscal 2007 guidance to €95 million-€100 million.

Elsewhere, GFI Informatique (+16.18%) leapt after Fujitsu made a €419 million bid. Publicis (+1.26%) was picked to manage Citigroup (C) global corporate brand identity and Global Consumer group ad campaigns. Unibail (+2.04%) may become part of the CAC 40 stock index, La Tribune reported. The company said Unibail is in the running with Natixis (+0.45%) to take the place of AGF (+0.09%) in the CAC 40.

Elsewhere: Stockholm edged lower, while the rest of the Nordic bourses traded in the black at mid-session.

The SMI index (-0.31%) failed to maintain a foothold above the gain line as UBS (UBS), Credit Suisse and Syngenta together knocked over 42 points from the index.

Claudia Perotti, Lydia Carroll, Sara Oscarsson, Isabell Witt, Michael Sanderson, Gaurav Panchal, Julien Manrique, John West, Ben Marino, Emma Stevenson, Pawan Girglani.

Steve Ballmer, Power Forward
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