An 8% slump in the Shanghai market weighed on sentiment
London: The FTSE 100 closed below breakeven Monday as US indexes continued to trade in the red as profit-taking kicks in. Also, an 8% slump in Shanghai weighed. The market was cautious ahead of rate decisions from the BoE and ECB this week. Crude was rose to US$65.95/bbl over an Indian Ocean cyclone and tensions in Nigeria. In the sector, BP (+0.62%) reportedly may spend as much as US$25bn developing oil and gasfields in Libya. In the commodity markets, gold closed higher on a weak US$. Copper gained on falling stock in London and fears of a strike in Mexico. Xstrata (-0.24%) opted not to match Norlisk Nickel's US$6.4bn offer for LionOre.
In banking news, top gainer Royal Bank of Scotland (+1.42%) has hired Deutsche Bank to sell Southern Water with a GBP4bn price, The Times reported. Also, RBS and Bank of America may split ABN Amro's LaSalle. Segro (-1.24%) agreed to sell its US business for US$2.9bn and would return GBP250m to shareholders via a special dividend. In drug news, AstraZeneca (-0.34%) bought DSM's factory in Canada. GlaxoSmithKline (-0.23%) presented data at ASCO yesterday from two key Tykerb studies. Goldman said the data will disappoint some. Investors switched into Shire (+1.10%).
Paris: The CAC 40 (-0.76%) closed firmly in the red Monday with Wall Street trading flat-to-lower after Friday's record highs. At home, Arcelor Mittal (+0.58%) finished as top points and percentage gainer after Platts quoted the steelmaker as saying that growth rates for worldwide steel consumption have now surpassed those of global GDP. Carrefour (+0.46%) has sold its four Slovakian hypermarkets to ECM Group NV for an undisclosed sum. The stock ended well off highs.
Also in the retail sector, Casino (+4.42%) shares jumped - it gave a presentation at a London roadshow today. Shares in Rallye (+5.21%), which holds 47% in Casino, also rose. Rumors of a merger between Casino and Rallye have been denied by Rallye. Traders also noted speculation that Albert Frere may be about to take a stake in Casino.
Elsewhere, BNP (-1.16%) was downgraded to neutral from buy at JP Morgan. AXA (-0.82%) has sold its Dutch operations for EUR 1.75bn to Holland's SNS Reaal. Saint Gobain (-1.39%) does not intend to sell its distribution arm, La Tribune wrote. Economic Times reported France Telecom (-0.85%) is close to securing the c.EUR 46m-EUR 55m purchase of the IT unit of Indian network services provider GTL. Finally, Safran (+0.99%) looks set to keep Jean-Paul Bechat as CEO after September, when he was due to resign, according to La Tribune. The paper adds that talks on a possible alliance, or merger, with Thales (-0.31%) have restarted.
Frankfurt: Xetra-Dax (-0.14%) ended a shade lower Monday - having briefly surpassed the 8,000 mark in the morning, its highest level from March 2000. However, the German benchmark could not maintain its momentum and closed marginally lower, while US markets traded on a similar note.
Auto stocks were in the limelight after the latest monthly sales data: VW's (+1.1%) US car sales rose 1% in May; DCX's (-1.12%) US sales were up 4%; BMW (-1.71%) saw an 8.7% rise; while Porsche's (-0.34%) North American sales increased by 1.7% last month to 3,600 vehicles, a new record. Meanwhile, Porsche now owns 30.97% of VW and can buy a further 20% of the stock without having to disclose the action to the market.
Elsewhere, Heideldruck (+5.77%) jumped on speculation KKR is doing due diligence on the group. Among chemicals and pharma stocks, Lanxess (-0.35%) was rumoured to bid between CHF24 and CHF26 per share for Switzerland's Clariant in the coming days. Evotec's (+7.99%) insomnia drug candidate EVT 201 saw positive proof-of-concept results. Qiagen (-4.52%) is to buy Digene, a US developer of screening tests for diseases affecting women, for US$1.6bn. Key on the broker was ABN Amro's downgrade of Air Berlin (-6.26%) to hold and Goldman Sach's reinitiation of Allianz (+1.5%) with a buy.