Oil issues gained Wednesday as crude prices reached record territory
The FTSE 100 ended higher on Wednesday with key oil shares BP (+0.71%) and ROYAL DUTCH SHELL (+1.05%) adding support as WTI traded around US$79/bbl. EIA inventories revealed a sharper-than-expected draw in crude stocks. Wall Street was trading higher, boosted by oil firms and comments from Treasury Secretary Paulson. Elsewhere, ITV (-1.51%) said third quarter advertising revenues continue to improve. The company unveiled its new growth plan, targeting 3-5% CAGR top-line growth over the next three years and doubling ITV's content revenues by 2012 to £1.2 billion. HOME RETAIL (+2.5%) said Argos like-for-like in second quarter rose 1.8%, in line with forecasts but Homebase like-for-like fell a much worse than expected 8% and the group is cautious on fiscal due to the uncertain consumer outlook. BARCLAYS (+0.08%) has injected US$1.50 billion to its Golden Key fund, The Times reports. BAE SYSTEMS (+3.18%) gained on news Armor Holdings has won an order to build 10,000 lorries for the US army. RIO TINTO (-0.49%) will provide a US$350 million loan facility to Ivanhoe Mines. COSTAIN (+0.66%) confirmed it is preparing a £60 million equity issue. UNIQ (-5.91%) plunged after reporting first half. Trading ex-dividend today: BHP BILLITON (-1.02%); KAZAKHMYS (+0.08%), RENTOKIL (-1.29%) and SCOTTISH & NEWCASTLE (-1.13%).
The CAC 40 (+0.53%) closed in positive territory with Wall Street moving into the black following Treasury Secretary Paulson's suggestion that the recent financial crisis does not stem from problems in the 'real economy'. Back home, Les Echos said that Egyptian telecom group Orascom is 'interested' if BOUYGUES (+4.21%) decides to sell Bouygues Telecom. In a related story, Le Canard Enchaine outlined what it dubbed the Elysee's 'favored scheme' for restructuring France's nuclear industry: AREVA (+0.01%) and ALSTOM (-0.49%) would be merged and a holding company created in which Bouygues would hold a 35% stake (having disposed of its mobile telephone business). The state would retain 18% in the new entity. France is also pressing Germany to abandon its hostility to nuclear power as it is looking at creating a world leader by restructuring Areva, the FT says. L'OREAL (+2.33%) moved higher as rumours circulated it could bid for CLARINS (+8.26%) - the former offered no comment. AIR France-KLM (-3.35%) was the biggest percentage loser after being downgraded to equal weight by Morgan Stanley. PSA (-0.76%) CEO Christian Streiff once again said the strong euro is hurting the industry, reported Reuters. Elsewhere, JC DECAUX (+4.71%) posted first half07 revenues up 7.7% to €1.019 billion. Merrill Lynch reportedly said VALEO (+4.28%) is well positioned to benefit from regulation on CO2 reduction.
Xetra-Dax (+0.2%) pared losses in late trade to finish slightly higher with the US DJIA and S&P 500 trading stronger on the back of the rising WTI price, which pushed oil producers up. Locally, dialysis specialist FMC (+3.2%) was top percentage gainer on the Dax after a US panel of health experts declined to recommend restrictions on the use of anti-anaemia drugs in kidney disease patients. BEIERSDORF (+2.97%) also moved higher after an upgrade from Morgan Stanley. Utilities E.ON (+1.91%) and RWE (+0.94%) were also stronger. Other stocks in focus included DEUTSCHE POST (-0.57%) as the EU has opened a new investigation into German state aid to postal services. CONTINENTAL (+1.48%) gained as it expects anti-trust approval for VDO in fourth quarter, seeing cashflow from this acquisition of more than €1 billion starting in 2009. INFINEON (-1.83%) plans to cut its stake in memory unit Qimonda to bolster its cash reserves. In the wider market, the German government has agreed to sell its stake in IKB (-3.4%), Handelsblatt reported, going on to cite financial sources who reckon IKB is still having 'massive problems' and may be forced into a fire sale of some of its assets. Key on the broker front, Morgan Stanley downgraded LUFTHANSA (-3.45%) to underweight and Citigroup upgraded MAN (+1.68%) to buy.