A roundup of Monday's action in European stock markets
The FTSE 100 closed flat tracking a weak Wall Street. Fading credit woes and a cooling oil price - at US$79.14/bbl - gave little support at the close. At home, banks and retail sectors led, but were offset by falling energy stocks. Financials gained after Alan Greenspan said the credit crisis could be coming to an end. Further, BARCLAYS (+3.58%) rose on hopes that it will lose the bid battle for ABN Amro to the ROYAL BANK OF SCOTLAND (+3.72%) consortium. A positive note by Citigroup helped insurers, with the broker reiterating buy on LEGAL & GENERAL (+0.59%). NORTHERN ROCK (+2.20%) was higher in volatile trade on talk of a rescue package at £1.75/sh. In earnings, TESCO (+6.54%) dished out an in-line 14.3% rise in first half underlying pretax profit. The retailer added that first half UK
like-for-like sales ex-fuel rose 3.5%, with August UK
like-for-like sales growth picking up 5%. MORRISON (+1.67%) chalked up gains. Utility SEVERN TRENT (-0.78%) said first half trading is in line, but wet weather conditions would hit fiscal revenues - predicting top line to be about £12 million, lower than expected. In a blow to BSKYB (+0.51%), the Competition Commission said the pay-TV company's 17.9% stake in ITV (+4.64%) restricted competition. The Commission added it will consult on possible remedies, including possible divestment of the shareholding.
The CAC 40 (+0.62%) closed the session in positive territory, though off intraday highs as Wall Street trades lower. Of local note, banking stocks were the main support to the index: SOCGEN (+4.09%), BNP PARIBAS (+2.50%), CREDIT AGRICOLE (+1.79%) added 23 points. Italian newspaper MF reported that AIR France
-KLM (+2.04%) is prepared to acquire Alitalia - but not at any price. VINCI's (+0.88%) CEO told Les Echos that Vinci's growth and orders have never been as high as currently. AIR LIQUIDE (-1.77%) bought respiratory homecare unit of Allied Healthcare for €51 million in cash. Les Echos reported that about 80% of the 5,000 French customers who switched to a new electricity supplier since 1 October went to GDF (-1.00%). ALSTOM (-0.20%) offered to buy back 6.25% March 2010 bonds to reduce debt, reportedly. In the broader market, NORBERT DENTRESSANGLE (+2.44%) acquired UK
's Christian Salvesen at a price of £0.92/share, valuing Christian Salvesen at approximately £254.4 million (€365.1 million). In broker news, Morgan Stanley reiterated its overweight stance on CAP GEMINI (+2.87%); SocGen downgraded GEODIS (-1.91%) to sell from buy and reiterates buy on EULER HERMES (+3.38%).
Xetra-Dax (+0.31%) closed slightly higher, but off earlier peaks as Wall Street turned lower after much worse-than-expected US pending home sales. Financials DEUTSCHE BANK (+2.57%), COMMERZBANK (+2.0%) and ALLIANZ (+0.89%) were well bid today as a number of market participants believe global credit crunch woes are over - not a belief shared by all. DEUTSCHE BOERSE (+1.61%) also supported the index as it reported trading rose 45% year-over-year to €194.1 billion in September. MAN (+4.38%) closed as leading riser on the Dax on rumours of a €120/sh - €125/sh bid from VW (-1.2%), traders said. In other news, INFINEON's (-0.92%) Qimonda unit and Sony plan to set up a j/v to design DRAM memory chips. BEIERSDORF (+0.76%) agreed to buy 85% of Chinese hair care group C-BONS for €269.45 million. There was market talk of TUI (unch) CEO Frenzel resigning, forced out by US activist investor Guy Wyser-Pratte. However, TUI dismissed the talk. K+S (+6.53%) said its 2007 earnings will be at the lower end of its €310-325 million forecast as it adjusts its currency hedges because of a strong euro compared to the US$. But a positive trajectory of potash prices keeps the market optimistic. GRENKE LEASING (+13.63%) lifted its guidance as third quarter prelims topped estimates. German politicians hinted at changing tax laws that may support the biofuel sector, thus buoying the likes of CROPENERGIES (+13.11%).
The Ibex ended off midday highs but with strong gains nonetheless. A falling oil price and 6.5% drop in pending home sales sees Wall Street in the red at the European close. Locally, BBVA (+3.26%) was the top points gainer after ABN Amro initiated with buy. Among the constructors, SACYR-VALLEHERMOSO (+8.78%) will sell its 33% stake in French firm Eiffage once the current legal dispute is cleared up, according to El Confidencial. ACS (+2.08%) will make a €114 million capital gain on the sale of its airports division. FERROVIAL (+4.97%) Chairman Rafael del Pino has increased his stake to 0.367%. Ferrovial was further boosted as its subsidiary CINTRA (+6.0%) announced the bond issue to refinance the 407 ETR highway is over-subscribed. Away from the constructors, TELEFONICA (-0.36%) fell on news Vodafone is in talks to buy Tele2's operations in Italy, where the Spanish giant has a presence via its indirect stake in Telecom Italia. Hesperia increased its stake in NH HOTELES (+1.85%) to 25.088%. VUELING (-12.26%) said falling ticket prices and rising fuel costs mean it cannot reach 2007 financial targets. In broker moves, Goldman Sachs added ABENGOA (-3.44%) to the Conviction Sell list. Note that the Ibex is currently made up of only 34 stocks, as ENDESA (-3.78%) has been temporarily excluded.
Nordic markets ended the day mixed with bourses giving up their early gains as Wall Street traded slightly lower. In Norway, STATOILHYDRO (-2.47%) and NORSK HYDRO (-3.79%) adjusted following the merger. Helsinki ended flat, with heavyweight NOKIA (+0.11%) keeping its head slightly above water as its US$8.1 billion takeover bid for Navteq was in focus. S&P Eq Res deems the move to be defensive, in anticipation of slowing handset sales growth. Exane, however, is more positive. Given the unique positioning of Navteq and the importance of mapping/positioning for Nokia, it believes this acquisition appears justified. Also in M&A, STATOILHYDRO received a fair share of broker attention: ING cut its target, Goldman Sachs assumed coverage with buy and Lehman set its rating at overweight. Elsewhere, LUNDBECK (+8.04%) surged following a positive drug trial result. Over in Stockholm, OMX (+1.99%) was well bid, as QIA submitted a filing document to the Swedish financial watchdog FI, regarding ownership of the exchange operator. In other news, Invik, owned by Icelandic Milestone upped its stake in CARNEGIE (+1.84%) to 9.7%, becoming the group's biggest shareholder. Meanwhile, Nordic investment bank ABG flagged that it holds 5.4% in Carnegie. Further, in broker action, ABN upgraded STOCKMANN (+1.56%) to buy following its SEK116/share bid for LINDEX (unchanged).