A roundup of Wednesday's action on major European stock markets
The FTSE 100 (-0.65%) closed in the red, as ANGLO AMERICAN (-4.38%), BHP BILLITON (-4.45%), BP (-1.93%) and XSTRATA (-4.73%) weighed on the index. Oil trades above US$142. Wall Street trades flat to lower as macro data were mixed. ADP private sector employment data for June fell 79k vs forecast of 20k, however May factory orders rose 0.6% vs forecast of 0.4%. At home, MARKS & SPENCER (-24.53%) plunged after worse-than-expected 1Q sales and a wary outlook, amid dwindling consumer confidence and challenging conditions. On the upside, ASTRAZENECA (+4.84%) surged after winning a court battle against Teva and Sandoz over a generic version of Seroquel. BARCLAYS (+1.33%) bounced back as Cazenove said GBP4.50bn may be enough after all to support balance sheet expansion, and maintain its equity tier 1 ratio at 5.5%. In the broader market, TAYLOR WIMPEY (-46.25%) crashed, dragging other housebuilders with it, after admitting it had not been able to raise additional capital, it would cut dividend and does not expect any recovery in the UK in the short term. BALFOUR BEATTY (-2.49%) said YTD trading continued to be strong, with the order book at the end of May at GBP11.8bn. CRH (-14.33%) warned 1H08 PTP will be lower y/y on weaker demand. INFORMA (+13.02%) confirmed it has received a preliminary approach from a private equity consortium at GBP5.06 per share.
The CAC 40 (-1.03%) ended in the red with steelmaker ARCELOR-MITTAL (-6.12%) weighing heavily. Wall Street trades slightly lower after a worse-than-expected reading of the ADP employment survey. Of local note, defensive plays such as SANOFI-AVENTIS (+3.19%) and FRANCE TELECOM (+3.47%) gained. Financials also rebounded. CREDIT AGRICOLE (+0.81%) raised EUR 5.9bn in rights offer. Said that for the remainder of stocks on sale, it received 30% more orders than shares offered. BNP PARIBAS's (+0.37%) board approved management shuffle, including new appointments and grouping of all retail banking activities under unified responsibility. SOCGEN (-0.07%) agreed to buy ABN Amro Holding's private-banking business in Gibraltar for an undisclosed amount. Separately, JP Morgan said SocGen may need an extra EUR 1.9bn in writedowns in 2008 while NATIXIS (+4.39%) may need an EUR 1.4bn in writedowns. JP Morgan added the worst is over for 2H08 writedowns. US-exposed MICHELIN (-0.15%) is raising prices by as much as 12% in North America for passenger and light trucks replacement tyres. DANONE (-3.05%) fell as Merrill and Cheuvreux downgraded to equal-weight and underperform, respectively. SODEXO (-5.13%) reported 9M sales of EUR 10.476bn, in line with expectations.
Xetra-Dax (-0.17%) turned slightly lower in late trade as Wall Street traded lower after worse-than-expected jobs data. Financials remained strong, however, as banks reassured the market after yesterday's speculation of profit warnings. DEUTSCHE BANK (+3.89%) said it expects to report a profitable 2Q, with the results showing no requirement for further capital. INFINEON (-3.3%) said it cannot rule out further writedowns on its stake in Qimonda. ARCANDOR (-4.50%) reiterated its earnings outlook, refuting market rumours it will warn on profits. Auto data showed DAIMLER's (-0.08%) US sales rose 13% in June, BMW's (-0.57%) slipped 11%, VW's (-1.21%) inched up 0.3%, while PORSCHE's (+0.36%) North American sales fell 19%. In general, German new car registrations were up 1% y/y in June, according to data from the VDA car industry association. DEUTSCHE BOERSE's (-0.14%) trade volume fell 31% y/y in June to EUR 189bn. PFLEIDERER (-2.98%) will buy back 1m shares by 25 July. Q-CELLS (-7.17%) was lower as UBS placed 700,000 shares at EUR 56.60 apiece. Talk of a share placement also weighed on SOLARWORLD (-6.2%). Key broker action included Morgan Stanley downgrading MERCK (-4.15%) to underweight and UBS upgrading MAN (+0.30%) to neutral. An upbeat note from Morgan Stanley on the telco sector supports the likes of DEUTSCHE
Piazza Affari ended higher, while Wall Street was trading flat to lower after ADP employment index showed that US private sector firms lost 79k jobs in June. Meanwhile, May's factory orders rose more than expected to 0.6%. Locally, Italian new car registrations slid for the sixth month in a row in June, down 19.5% to 84,275 units. FIAT's (+2.67%) fell nearly as much. Citigroup cut the automaker's target price to EUR 15, but kept buy. In M&A news, BANCO POPOLARE (+3.62%) agreed to sell its 57% stake in BP di Mantova to BP MILANO (-1.45%) for EUR 32.49m. The Burani family aims to launch a takeover offer for MARIELLA BURANI (+6.99%) at EUR 18/sh to delist the group from the Italian stock exchange. SEAT PG (-2.08%) has hired a leading investment bank to examine potential scenarios to enhance the value of its foreign operations. Said this move aims to focus the company on the Italian market. On the trading update front, FONSAI's (-0.2%) CEO, Fausto Marchionni, said results from financial operations in 1H were 'difficult', adding that the insurer is hoping for a recovery. ALLEANZA's (+0.87%) chairman said the group's performance in 2Q was positive. In other news, PM Silvio Berlusconi said IMPREGILO (+0.3%) is finishing work on the Acerra WTE plant in the Campania region. In broker action, Goldman downgraded FASTWEB (-1.96%) to neutral, keeping target at EUR 25.00.
Spanish shares ended higher on Wednesday, though breadth was 14-20 negative, as heavyweights TELEFONICA (+2.32%) and SANTANDER (+1.66%) lent support. Declines among the utilities limited gains, however. Wall Street was trading lower at the European close following disappointing ADP payrolls. WTI trades above US$142/bbl. Of local note, IBERDROLA RENOVABLES (-4.83%) made a EUR 175m offer for all the shares in Greece's C.Rokas that it does not already own (IBR holds 52.7% currently). Romania has awarded INDRA (+2.29%) a EUR 18m contract to provide vigilance systems along the Romanian coastline, Negocio reports. REPSOL (+0.16%) is to invest EUR 950m in Brazil to develop two oil discoveries in the Santos basin, El Pais reports. ANTENA 3 (-0.8%) said it will bid for the new FTA license being auctioned by the Colombian government. In broker moves, Morgan Stanley upgraded INDITEX (-0.49%) to overweight, Deutsche Bank initiated TELEFONICA with buy and Citigroup cut SACYR-VALLEHERMOSO's (-2.46%) target price.