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A roundup of Thursday's action on major European exchanges
The FTSE 100 continued its upward trend while at the other side of the pond, Wall Street was trading slightly lower amidst news of falling leading indicators. Hortative EIA data on inventories caused crude prices to climb slightly settling at around US$91.58. While RDS (+2.02%) and BP (+1.24%) gained, TULLOW OIL (-3.08%) fell after a poor well update. JOHNSON MATTHEY (+5.634%) rallied on persistent talk that it could be a takeover target for Dow Chemical. ITV (+1.69%) rose after the UK Competition Commission issued a report recommending BSKYB (-1.15%) to reduce its current 17.9% stake to below 7.5%. The news fueled speculation that RTL could be a buyer of the shares. BARCLAYS (+0.80%) announced it would be suing Bear Stearns for systematically hiding losses in a fund which swallowed US$400 million of its money. 3i (+0.20%) will be buying a 16.2% stake in Spain's Union Radio after paying €225 million to owners Prisa and Godo. KELLER (+3.20%) said fiscal numbers would come in at the top end of estimates. Finally, MCBRIDE (-9.22%) plunged after warning high raw materials prices would hit margins, while comforting that first half revenues would be ahead of last year.
The CAC 40 (+0.26%) closed the session modestly higher, with Wall Street trading mixed, amid strong earnings from Oracle but bad news from Bear Stearns with fourth quarter loss of US$854 million. Of local note, TOTAL (+1.28%) was the main gainer, adding 13 index points. Citigroup raised its oil forecast for the third time this year, forecasting restricted supplies from OPEC. ARCELOR MITTAL's (+1.33%) CEO reportedly said financial market woes will not hurt steel demand. Virgin's boss Richard Branson is reportedly pushing for a bigger version of the Airbus A380. EADS (+1.72%) gained. CAPGEMINI (+2.65%) also rose - on the Oracle numbers. ACCOR (+0.89%) agreed to sell 57 French and Swiss hotels for €518 million. VIVENDI's (+0.58%) SFR will buy Louis Dreyfus's 29.5% stake in NEUF CEGETEL (-4.74%) at €34.50 per share. SUEZ (+0.57%) will sell its 35% stake in Suez Environnement to Belgian investor Albert Frere in second half08, according Le Point magazine. Said the sale will take place once the merger with GDF (+0.65%) is completed. Italy's government is close to reaching an internal agreement to enter into exclusive negotiations with AIR France KLM (+0.17%) over the sale of Alitalia. VINCI (-2.92%) fell on talk it could post a profit warning. Vinci denied the rumour. In broker news, Lehman Brothers downgraded ATOS (-2.54%) to equalweight from overweight.
Xetra-Dax closed higher on the penultimate trading session before Christmas, while Wall Street was having a mixed day amid some varied corporate earnings. Key for ADIDAS (+1.19%), Nike's quarterly income topped expectations. SAP's (+0.28%) arch rival Oracle reported strong quarterly profit, up 35% year-over-year on higher-than-expected software sales, and delivered an upbeat outlook statement. Of local note, CONTINENTAL (+3.47%) said it is selling the electric motors business that it acquired when it landed Siemens' VDO unit. No amount was disclosed but Reuters reported a source as saying the price was €250 million. ALLIANZ (+0.13%) has lifted its strategic stake in Banco Popular to 9.9% and raised the number of board representatives it has at Spain's third largest bank to two. IVG (+3.81%) is planning a REIT IPO for early 2008 made up of German office properties worth some €3.5 billion. FREENET (-3.40%) has decided to end talks about selling parts of itself to different buyers, including DRILLISCH (+0.59%). On the earnings front, ESCADA (-10.72%) reported fiscal 2006/07 EBITDA of €68.2 million, down 8% year-over-year and lower than expected. The clothes retailer expects sales and core earnings to come in lower next year than this year. Key on the broker front, UBS downgraded DEUTZ (-6.82%) to sell from neutral and cut its targets on DEMAG CRANES (-4.03%) and TOGNUM (-1.55%).
The Nordic bourses closed mixed for the third straight day, with Stockholm and Oslo in the red and other major bourses in the black. Wall Street was trading higher after Bear Stearns flushed out its fourth quarter write-down. Back home, Helsinki ended higher, partly thanks to gains at KESKO (+3.92%) after JP Morgan upgraded the company to neutral. Finnair (+0.37%) also supported the index as it rose €248.1 million in a share issue. Copenhagen advanced, led by MAERSK (+1.71%) after the company was upgraded to hold by SocGen. Stockholm fell a tad with losses at VOLVO (-2.07%) outweighing gains at ENIRO (+0.4%) and ERICSSON (+0.2%). VOLVO fell following a report that its total trucks deliveries in Jan-Nov increased 4% year-over-year to 209,426, meaning that deliveries in November rose 21% year-over-year. ENIRO rose on a UBS upgrade to buy, while ERICSSON advanced after an Entel PCS order that will allow the company to expand its mobile GSM/WCDMA/HSPA network in Chile. Oslo dropped just below the gain line as advances at PGS (+3.06%) on an upgrade to outperform from Carnegie were more than offset by losses at NORSKE SKOG (-2.78%). The latter said it is looking to acquire up to five Chinese paper plants, merge them into its existing Asian businesses and list the new group on the Hong Kong Exchange, according to Dagens Naeringsliv.
The AEX (+0.83%) closed higher, with Wall Street also in the black. Bear Stearns reported a US$854 million fourth quarter net loss, but there was a feeling the announcement flushed out the bad news. Back home, ROYAL DUTCH SHELL (+1.34%) moved up, with WTI at US$91.54. ARCELOR MITTAL (+1.43%) made headway after press reports quoted CEO Lakshmi Mittal as saying financial market woes will not hurt steel demand. PHILIPS (+1.02%) enjoyed an ING target increase to €42 from €40. The broker keeps its buy rating following €5 billion buyback announcement and news that Philips plans to sell its Set-Top Boxes and Connectivity Solutions activities to the UK's Pace for c.€90 million. KPN (+0.74%) announced it will sell the first part of its real estate portfolio and that it has reached a two-year pay deal with Dutch unions. Elsewhere, DSM (-1.01%) announced its unit DSM Venturing has made an investment in Novomer, a new materials company specializing in low-cost, high-performance, 'green' plastics, polymers and other chemicals. Financial details have not been disclosed. In wider market news, ARCADIS (+1.77%) has reportedly signed a three-year deal to provide engineering services to Rotterdam port. No financial details have been disclosed. INNOCONCEPTS' (+4.99%) management has bought a 5.9% stake in the company, according to press reports.