Markets & Finance

European Stocks Finish Mixed


LONDON

The FTSE 100 closed slightly below breakeven as financials weighed. U.S. markets were higher amid auto rescue hopes. WTI was at US$42.78/bbl.

At home, RIO TINTO (+16.6%) said it will slash 14,000 jobs, more than halve 2009 capex and retain DPS at 2007 levels in a bid to cut net debt. The miner is seeking to lower operating costs by at least US$2.5bn pa in 2010. VODAFONE (-2.59%) retreated after SocGen cut its target and reiterated sell. REED (-3.39%) said it has ended talks regarding the RBI sale.

The FTSE 100 committee will announce later today results of its quarterly index review. STAGECOACH (+5.22%), LONMIN (+6.19%), FRESNILLO (+1.51%), JOHN WOOD (+8.81%) and PETROFAC (+7.23%) are expected to be lose their places, while TATE (+0.99%), HOME RETAIL (-6.22%), RANDGOLD RESOURCES (+6.97%), AMLIN (+1.83%) and SERCO (+3.14%) could be promoted to the blue chip league.

WOOLWORTHS (susp) is set to move to a closing down sale after administrator Deloitte fails to find a buyer, FT.com reported. LADBROKES (-5.95%) said chairman Sir Ian Robinson is to step down and will be replaced by Peter Erskine. MARSTON'S (+7.74%) agreed to extend a bank facility to August 2013. CARILLION (+8.88%) said it expected FY u/l EPS to rise 15%, ahead of previous expectations. - Gaurav Panchal - S&P MarketScope

PARIS

The CAC 40 (+0.68%) closed the session higher with Wall Street trading in the black amid speculation lawmakers will approve a US$15bn bailout to keep automakers afloat. At home, car makers PSA (+6.85%) and RENAULT (+3.21%) gained. WTI rose to c.US$42.80/bbl but off intra-day highs following an unexpected increase in U.S. supplies of gasoline and distillate fuel.

TOTAL's (+0.47%) CEO Christophe de Margerie reportedly said that earnings in 2H08 will be less good than in 1H. Meanwhile, AIR FRANCE-KLM (-0.15%) fell on higher oil prices. Its CEO was meant to meet CAI executives today to discuss a potential deal with Alitalia.

Elsewhere, UBS added AIR LIQUIDE (-3.26%) to its least preferred list. Credit Suisse upgraded SOCGEN (+3.99%) to outperform. SUEZ ENVIRONNEMENT's (+4.84%) Eurawasser unit won

two 'significant management contracts' in the Rheingau region of Germany. VIVENDI (-2.95%), which owns 54% of Activision Blizzard, the world's largest video-game publisher, fell after Electronic Arts said 2009 revenue and profit will be less than forecast. UBISOFT (-6.10%) and GAMELOFT (-1.01%) took a knock. NEXANS (+6.58%) sees 2009 as a year of growth and acquisitions. GROUPE PARTOUCHE (-6.55%) posted 4Q revenue down 13% to EUR 115.5m. BELVEDERE (-4.35%) slipped into 1H net loss of EUR 38.7m. -JM - S&P MarketScope

FRANKFURT

The Dax (+0.54%) closed in the black in what was a volatile session, asWall Street opens higher. Auto stocks are in focus as the White House and Congressional Democrats have reached a tentative agreement to rescue the troubled U.S. car industry with a US$15 billion package, which will be voted on by the House of Representatives as early as Wednesday. It is also being sent to the Senate for consideration. Local auto stock-specific, DAIMLER (-0.08%) has filed to acquire minority stake in Russian truck maker Kamaz.

Elsewhere, HYPO REAL ESTATE (+3.37%) is receiving an extra EUR 10bn in state liquidity guarantees, while the European Commission says it is making progress on an aid deal for COMMERZBANK (-1.5%). BAYER (-0.93%) is cutting production of plastics products as orders fall, according to the FTD, while LANXESS (-1.73%) is reducing output at around a third of its German plants until early January.

Management board member Paul Achleitner has bought 25,000 shares in ALLIANZ (+1.14%) for more than EUR 1.6m. In an attempt to secure fresh loans his family needs to escape the liquidity crunch, tycoon Adolf Merckle has made creditor banks a new offer of HEIDELBERGERCEMENT (+12.29) as security, he told FAZ. Key on the broker front, LINDE (-3.22%) is removed from UBS's most preferred European chemicals list and BASF (+2.67%) is added to it, while GERRESHEIMER (-24.68%) is downgraded to hold at Dresdner. -MS

NORDIC

Nordic bourses rallied in the afternoon, with only Copenhagen (-1.81%) in the red at close. Helsinki (+1.13%) and Oslo (+1.98%) capitalised on earlier gains, while Stockholm (+0.42%) edged into positive ground. U.S. stocks gained in early trading. In macro focus the November US budget is due at 19:00 GMT. WTI rebounded after an overnight fall, but fell off highs to trade at US$42.80 a barrel.

Of local interest macro wise, Norway's central bank will issue a NOK11bn treasury bill maturing 15 December. In corporate newsflow, SKF (+7.33%) announced it would, as expected, reduce its production capacity, reduce costs and cut c.2,500 jobs globally in light of 'much lower total demand' in 4Q. Meanwhile, NOKIAN RENKAAT (+0.36%) has begun a new round of redundancy talks, aiming to cut c.450 jobs. The group further plans to cut production at its plant near Tampere, Finnish YLE reports. Deutsche Bank trimmed TP for the stock. Elsewhere, SCA (-1.82%) held a CMD in Stockholm today, while SAAB (+0.4%) held a press and investor conference in Stockholm on the back of the recent failed aircraft deal in Norway.

In brokerage focus, ERICSSON (+0.31%) saw its rating cut to hold at Citigroup, while Carnegie upgraded MTG (6.88%) to outperform. RBS initiated coverage of VOLVO (+4.34%) with buy and started SCANIA (+7.89%) with hold, while Citigroup cut TP for SHB (-1.84%), DANSKE BANK (-3.82%) and NORDEA (-3.15%). -Sara Oscarsson - S&P MarketScope

AMSTERDAM

The AEX (+0.52%) closed firmly higher supported by insurance stocks. U.S. markets were in positive territory amid auto rescue hopes. WTI was at US$42.78/bbl. Meanwhile, ROYAL DUTCH SHELL (-1.58%) said it has completed the sale of its 50% shareholding in Refineria Dominicana de Petroleo for US$110m to the Dominican Republic's government. Kepler cut target on the oil major, but maintained its buy rating.

Elsewhere, PHILIPS (-0.61%) fell following a guidance cut from LG Display, in which the Dutch electrical goods player holds 19.9%. TOMTOM (+16.91%) navigated into the stratosphere, with traders saying the stock was buoyed by yesterday's bid for Sweden's Wayfinder from the UK's Vodafone. Among broker changes, UBS added AKZO NOBEL (+4.79%) to its European Chemicals Most Preferred List.

Away from the AEX, Roberto Colaninno and Rocco Sabelli of the CAI consortium are set to meet AIR FRANCE-KLM (+1.9%) Chairman-CEO Jean-Cyril Spinetta and his successor CEO Pierre-Henri Gougeon today, with press sources suggesting they will discuss details of a deal to make the Franco-Dutch airline Alitalia's industrial partner. VASTNED RETAIL (-2.04%) has sold part of its Dutch portfolio for EUR 37.1m. -John West - S&P MarketScope


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