A roundup of Tuesday's action in major European stock markets
The FTSE 100 finished only slightly higher on Tuesday, as Wall Street also tentatively moved back into the black buoyed by solid quarterly results from Goldman Sachs but restrained by discouraging data on housing starts and permits. In the UK, November CPI data were below expectations. Activist investment firm Trian Fund Management confirmed interests in 4.5% of shares of CADBURY SCHWEPPES (+2.47) with Qatar Holding LLC, calling on the company to enhance shareholder value. Banks remained in focus after HM Treasury confirmed to extend the guarantee arrangements for NORTHERN ROCK (-4.92%), to a wider range of wholesale products. AGGREKO (+13.34) unveiled a strong second half performance and expected fiscal results to be at the upper end of estimates. DEBENHAMS (+8.28%) rebounded on news Micky Jagtiani, chairman of Landmark Group, had built a 7.37% stake. REXAM (-2.46%) fell after a Citigroup downgrade with the broker citing increased uncertainty about prospects as its reasoning and DRAX (-6.8%) plummeted on disappointing forecasts. Positive trading news lifted NATIONAL EXPRESS (+4.15%) and COOKSON (+1.97%) thinks fiscal results will be at the upper end on estimates. REGUS (+3.55%) also unveiled a strong performance and raised its final dividend by 67%. Finally, Altadis shareholders approved a change in the tobacco firm's bylaws, paving the way for the takeover by IMPERIAL TOBACCO (+1.22%).
The CAC 40 (-0.10%) erased earlier gains and closed the session slightly lower while Wall Street trades flat. Goldman Sachs posted record quarterly earnings but is 'cautious about the near-term outlook'. Locally, Italy's Transport Minister Alessandro Bianchi has said that the rival offers for Alitalia need to be studied more carefully. AIR France-KLM (+0.60%) gained. ARCELOR MITTAL (+0.19%) has won approval to increase its stake in Hunan Valin Steel Tube & Wire Co, adding to its expansion in China. Separately, it has completed 27 million share buyback at average €50.15 per share. EADS (+0.13%) may decide this week on whether to sell four Airbus factories to US-based Spirit Aerosystems Holdings, Les Echos reported. In further news, Tiger Airways, partly owned by Singapore Airlines, has reportedly taken an option for an order for 20 more Airbus A320s. GDF (-0.39%) plans to buy a 40% stake in SECHILIENNE-SIDEDC (+2.25%), a wind power company. VINCI (-0.55%) acquired Netpark GmbH to expand its presence in Germany. NEUF CEGETEL (susp.) asked for a suspension of trading in its shares after being told of talks between VIVENDI's (-0.29%) SFR and investment firm Louis Dreyfus for what may be a €5 billion purchase of Neuf Cegetel, Bloomberg reported. In broker news, PERNOD RICARD (+3.14%) has been reportedly raised to outperform by Sanford Bernstein.
As Wall Street traded flat amid strong earnings from Goldman Sachs and Best Buy as well as in-line housing data, Xetra-Dax closed in the black. But not all blue chip stocks were gainers today. FMC (-2.96%), for one, was in the red. A ruling by the Senate Finance Committee in the US, to delay for six months a 10% cut of Medicare physician pay rates, means reimbursements to some Medicare providers, such as the German kidney dialysis company, may be reduced to help finance the current physician payment fix. On a positive note, broader market-listed SOFTWARE AG (+5.88%) won a legal battle related to market entry in Brazil and, therefore, lifted its 2008 EBIT margin guidance to 23-24%. In other news: ARCANDOR (-4.17%) reported third quarter adjusted sales up 131% at €7.4 billion and quarterly adjusted EBITDA up nearly tenfold at €700 million, helped mainly by Thomas Cook's contribution and a cut in losses at the Primondo mail order unit. The department store operator said it is satisfied with Christmas business so far. FRAPORT (-1.01%) has been given the go-ahead by the State of Hesse to expand Frankfurt Airport. A ban on night flights has also been lifted. Key broker action included UBS raising its target on SIEMENS (+0.95%), Deutsche resuming coverage of TUI (-1.21%) with a sell rating and Merrill Lynch adding UNITED INTERNET (+3.42%) to its most preferred European telecoms list.
Milan ended Tuesday's session mixed while across the pond Wall Street trades above the gain line. Back at home, ENEL (-0.37%), TERNA (-0.07%) and AEM MILANO (+1.8%) were in focus as electricity demand in Italy reached a new record high yesterday. The utilities sector was also reviewed by Goldman Sachs, which said energy commodity prices would remain the main driver of earnings growth in sector. ALITALIA (+1.1%)'s board is currently holding a meeting to compare plans from Air One and Air France-KLM. Ahead of this, Italy's Transport Minister Alessandro Bianchi said more time was needed to carefully study the offers. On the earnings front, LOTTOMATICA's (+2.95%) CEO Marco Sala said that revenues from lottery games will reach €6 billion this year. In other news, MEDIOBANCA (+0.22%) started today its 18-month buyback program of up to 2% of share capital. BANCO POPOLARE (+1.05%) could receive a short-list of candidates for its unit Efibanca by as soon as Thursday. The consortium led by ENI (-0.25%) at Kashagan said aims to reach an agreement with the Kazakh govt by 20 Dec. CELL THERAPEUTICS (+7.57%) rallied as it will submit its lung cancer drug Xyotax for EU approval before expected. On the broker front, GEMINA (-3.1%) fell as Cheuvreux reinitiates coverage with underperform rating and a target price of €1.30.
Spanish stocks ended Tuesday's session in the the red as Wall Street trades flat-to-higher following solid quarterly results from Goldman Sachs and gains in energy shares. In the UK, November CPI data was relatively tame. Of local note, SOGECABLE (+4.53%) was the best performer of the day as a Spanish court ruling made yesterday enforced the 8 October injunction, which upheld the July 2006 agreement between Sogecable and Mediapro on football TV rights. Goldman Sachs noted that this ruling is not a verdict on the central dispute, but came from the same judge and, thus, could be taken as an encouraging indicator for Sogecable. BBVA (-0.36%) was eyed amid press reports that it wants to enter the Polish banking market and may be looking for acquisitions. In further M&A news, El Mundo said Gala Capital asked for the support of Caja Madrid's Chairman Blesa to enter IBERIA's (+1.29%) share capital in January and even to launch an offer for the airline. ALTADIS' (+0.02%) shareholders voted to alter the bylaws, removing a clause limiting voting rights. This paves the way for the takeover by Imperial Tobacco. In broker moves, Goldman Sachs raised target prices across the utilities sector, but downgraded REE (-0.16%) to sell.