A roundup of Friday's action in European bourses
The FTSE 100 closed firmly higher as Wall Street traded in positive territory on stronger-than-expected jobs data, shrugging off a profit warning at Merrill Lynch. Yesterday, the BoE kept interest rates steady at 5.75%. Moreover, BRITISH LAND (-3.26%) said it has withdrawn plans to sell Meadowhall stake, citing uncertainty in financial markets. The move has sparked concerns of a sharper UK property market slowdown. HAMMERSON (-5.33%), LAND SECURITIES (-3.38%) weakened. Oil traded around US$81/bbl keeping energy majors strong. In company news, BARCLAYS (+0.61%) admitted defeat in the battle for ABN Amro. This has opened the way for the ROYAL BANK OF SCOTLAND (+0.80%) consortium to take over ABN. Banking stocks A&L (-7.86%) and HBOS (-1.93%) fell on rating downgrades by Deutsche and ABN Amro. In broker moves, CADBURY SCHWEPPES (+2.39%) sweetened up after Bernstein said that the market has lost sight of the excellent confectionery business. Mining stocks were firm on a bullish note by ABN Amro. In other news, EASYJET (+4.11%) said it expects fiscal pretax profit minus one-offs to be at the top end of earlier guidance, as it unveiled a 14.2% rise in September traffic.
The CAC 40 (+0.67%) closed higher while Wall Street trades in positive territory. Non-farm payrolls came in stronger than expected, holding off bad news in the form of a third quarter profit warning from Merrill Lynch. Locally, ARCELOR MITTAL (+2.70%) has acquired some €84 million of its own shares at an average price of €55.26/share. Traders noted PERNOD RICARD's (+1.24%) AGM on 7 November will discuss a motion to enact a 2-for-1 stock split. TOTAL (+0.24%) CEO Christophe de Margerie has said the oil giant will not withdraw from Burma, reported Le Monde. In further news, Total is eliminating 155 jobs from Marketing France, representing some 10% of the division. E.ON would consider buying assets that SUEZ (+0.24%) and GDF (unch) would have to sell following the merger of the two French utilities, De Tjid reported. In further news, Suez Energy International could expand its operations in Chile, reported Reuters citing the unit's chief executive. On the downside, ALCATEL-LUCENT (-0.83%) denied it was poised to lose business with AT&T to its rival Ericsson, as FT reported. Credit Suisse downgraded L'OREAL (-0.74%) to neutral. In the wider market, BUSINESS OBJECTS (+3.58%) shrugged off a downgrade to neutral from Credit Suisse to trade higher on revived takeover rumours.
Xetra-Dax (+0.72%) closed above the 8,000 mark in positive territory after payroll numbers in the US came in better than expected. Utility stocks lifted the Dax as Credit Suisse raised E.ON's (+1.32%) target to €154, reiterating outperform. Auto stocks were also strong. VW (+4.4%) rose on a bear squeeze and talk of PORSCHE (+2.72%) increasing its stake. Also, the car giant may be entering the STOXX 50 when ABN Amro is removed from the index. M&A talk also lifted stocks in other sectors: there was renewed talk of HENKEL (+0.49%) being interested in BEIERSDORF (+1.61%), while PREMIERE (+7.44%) rose on takeover speculation, with US-based Comcast Corp mentioned as a possible bidder. However, PREMIERE said it was not aware of any interest. Away from market chatter, SIEMENS' (+0.76%) new CEO said he will overhaul the engineering and electronics group's management structure to give more power to the heads to be appointed for its key three big business. He added that lighting unit Osram is not up for sale, nor the TS trains business. SGL CARBON (+2.58%) plans to invest some €300 million over the next five years to raise its carbon fibre capacity. It aims to boost sales at its carbon fibres division by clearly over 15% per annum. Alitalia drew up a shortlist of potential buyers including Air France and LUFTHANSA (-1.01%).
The Nordic indices ended higher, in line with other European bourses, while US markets rallied. Despite a profit warning from Merrill Lynch, Wall Street climbed, supported by a stronger-than-expected employment report, although August non-farm payrolls were revised to +89,000 from the initial figure of -4,000. Back in the Nordics, OMX (-0.35%) rumours appeared, suggesting that QIA had applied for up to 100% ownership authorisation for the Scandi exchange operator even though they are very unlikely to want to get full ownership. Elsewhere, Eivind Reiten, chairman of newly merged STATOILHYDRO (+0.14%), announced last night that he will resign following an investigation into NORSK HYDRO's (+1.06%) oil dealings in Libya. Over in Stockholm, ERICSSON (+2.45%) built on its early gains as the FT reported that Alcatel-Lucent may lose mobile infrastructure sales with AT&T to the Swedish group. However, Alcatel-Lucent subsequently said it remained a supplier to AT&T. In other news, CARNEGIE (+0.35%) underperformed the Swedish market as it may be fined an additional NOK 0.5 million by the Norwegian financial watchdog Okrim. SAS (-1.03%) reported September group traffic up 5.9% year-over-year, but also stated that it estimated the financial impact of the grounding of its Dash8/Q400 fleet to be around SEK500 million.
Spanish shares ended solidly higher amid gains in TELEFONICA, SANTANDER and ACCIONA. US markets make good progress following stronger-than-expected September non-farm payrolls and upward revisions to August and July numbers. Of local note, TELEFONICA (+2.38%) was boosted by target price hikes from JP Morgan and Caja Madrid ahead of next week's investor day. SANTANDER (+0.87%) remained in the spotlight as the consortium's offer for ABN Amro closed. Barclays has already conceded defeat. ACCIONA (+3.07%) and Enel have won acceptances totalling 92% of ENDESA (+2.68%). ACS (-0.23%) unit Dragados Offshore has been awarded the €220 million contract to build the world's largest oil drilling ship, according to the Spanish press. Outside the selected index there was better news for VUELING (+26.5%) at last as Expansion reports Planeta will not sell its 15.87% stake. Additionally, the airline delivered solid traffic figures, saying September passenger traffic rose 75.2% with load factor up 4.1pp to 78.8%. In further broker action, Goldman Sachs initiated on ALMIRALL (+7.22%) with buy while Deutsche Bank upgraded PASTOR (+0.17%), but cut target prices across the Spanish retail banks sector.