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A roundup of Thursday's action in European bourses
The FTSE 100 ended Thursday's session slightly higher, but off the best levels of the day as VODAFONE (-1.17%) and miners weighed. The pound edges higher against the US$ after the Bank of England and ECB unsurprisingly kept interest rates steady at 5.75% and 4% respectively. By Europe's close, Wall Street was flat on slightly higher-than-expected jobless claims. Locally, BP (+0.9%) will announce a major restructuring in the next two weeks that will result in job losses throughout the group and the removal of levels of management, The Times writes. Banks were the best performers with bid talk supportive. Speculation is Bank of America is looking to bid £7.50/sh for BARCLAYS (+2.34%). The British bank's takeover offer for ABN Amro ended today. Citigroup is ready to provide over £5 billion in financing for a takeover of NORTHERN ROCK (+6.52%), The Times reported. In company updates, MICHAEL PAGE (+6.69%) said third quarter gross profit rose 38.5%, in line with estimates. ICAP (-3.1%) disclosed that fiscal pretax profit will be at the upper end of analyst estimates. HALFORDS (-2.12%) reported an in-line 5.5% rise in first half like-for-like sales. In broker action, YELL (+0.33%) gained on a positive ABN Amro note, despite a target cut from the broker. The directories publisher has also reportedly been upgraded to outperform at Cazenove. In other news, ABBOT (+21.85%) surged after confirming it has received bid proposals.
The CAC 40 (-0.03%) closed the session flat with Wall Street trading modestly higher. Initial claims came in higher than expected. The BoE held rates at 5.75% and the ECB stuck at 4%. At home, SOCGEN (+2.02%) reiterated its 2007-08 targets. Other banks also gained: BNP (+0.76%), CR. AGRICOLE (+0.64%). In broker news, JP Morgan upgraded EADS (+1.20%) to overweight from neutral, SocGen upgraded SANOFI (+1.12%) to buy from hold. ARCELOR MITTAL (-1.18%) weighed heavy. CARREFOUR (-0.93%) also fell. A source suggested it could be due to the fact that France is mulling an increase in taxation on property capital gains to 33%. STM (-1.12%) suffered amid fears of a price war in the chip sector. Intel's shares were trading some 0.89% lower. According to a Challenges article, GDF (-0.57%) may not be able to complete its merger with SUEZ (+0.07%) before June 2008. The magazine also reported that LVMH (+0.50%) has received five expressions of interest in buying La Tribune. Staying with luxury brands, HERMES (+4.68%) climbed amid rumour of it being a potential bid target. However, many traders said the stock was receiving technical support. PERNOD RICARD's (-0.80%) board is seeking to raise its new debt limit to €5 billion at the AGM on 7 November. MAUREL ET PROM (-1.14%) abandoned a Congolese exploration well due to its 'poor quality'. /JW & JM - S%P MarketScope, email@example.com
Xetra-Dax (-0.13%) closed a tad lower on Thursday, while DJIA traded flat as investors await tomorrow's key US jobs report. Auto stocks were the strongest performers today. DAIMLER (+0.3%) disclosed that its Mercedes Car Group division saw sales rise 7.4% year-over-year in September to a record 124,600 vehicles. At its EGM, shareholders approved the group's name change to Daimler AG from DaimlerChrysler. MAN (+1.31%) extended gains from the last two sessions on talk that VW (+0.4%) may take over the truck group without any involvement with Scania. VW is seen offering €120-125 per share. Tech stocks were among the worst performers: SAP (-1.56%) and INFINEON (-2.98%) down. There were fears of a chip price war, sending Intel's shares lower as Morgan Stanley talked of an inventory correction. In the pharma sector, India's largest biotech company, Biocon Ltd, is in talks with BAYER (-0.49%) about jointly developing biotech drugs, according to the Economic Times. SIEMENS (-0.48%) announced just before market close that it has to pay a fine of €201 million relating to questionable payments at at the Com Group. The broker action included Citigroup upgrading RATIONAL (+1.67%) to buy and ING lifting its targets on RWE (-0.08%) and E.ON (+0.07%). /MS & IW Sanderson - S&P MarketScope, firstname.lastname@example.org
Nordic markets ended mostly lower, with Helsinki under the most pressure, hit by falling paper manufacturers. Wall Street was flat ahead of tomorrow's non-farm payrolls data while back in Europe, both the BoE and the ECB keep rates on hold, as expected. In the Nordic region, TELELOGIC (-9.13%) fell heavily as IBM prolonged the acceptance period for its bid on the Swedish IT group, as the EU Commission extended into a second phase of review. Cheuvreux said this probably implies that the Commission sees some obstacles for the deal. CARNEGIE (unch) was in focus as its decision to withdraw from its assignment to assist the Swedish government in its sale of stakes in OMX (+0.71%) and SBAB may delay the sell-off for up to six months, Dagens Nyheter reported. On a more positive note, STOLT-NIELSEN's (+2.3%) third quarter net income rose to US$39.8 million from US$36.8 million last year. Elsewhere, SAS (+3.19%) wants compensation from Bombardier regarding the grounding of its Q400 fleet, but the Canadian group yesterday refused to confirm that it will start talks with SAS. In broker action, Deutsche Bank downgraded the European paper sector, arguing the weak US dollar has wiped out possible 2008 earnings recovery. Consequently, STORA ENSO (-5.46%), UPM (-7.69%), M-REAL (-3.39%), NORSKE SKOG (-3.02%) and HOLMEN (-3.68%) all fell heavily. /SO & OM - S&P MarketScope, email@example.com
Spanish equities ended the session lower with TELEFONICA and the constructors under pressure. Wall Street was trading flat to higher at the European close. The ECB and BoE both kept rates on hold, as expected. Locally, ACCIONA (-2.33%) fell amid a report in Expansion it will not be able to sell its baggage handling business until end of 2008, due to a clause in the contract with Aena. SOGECABLE (-1.95%) has suffered a new blow, losing exclusive rights to Italian football, reports El Confidencial. TELEFONICA's (-1.46%) O2 UK reportedly aims for 1 million UK broadband customers. O2 and Apple are also planning a multi-million pound advertising campaign as they prepare to launch the iPhone in Britain. FERROVIAL (-4.28%) gave up yesterday's gains as Merrill Lynch removed it from its Europe 1 list. SANTANDER (-0.07%) was in focus as the ABN Amro bid battle draws to a close. Barclays' offer closed today, and the RBS-led consortium's offer ends tomorrow. The consortium is expected to emerge victorious. BANCO POPULAR (+0.24%) also gained after saying it expects 2007-09 EPS growth in the mid-teens.