UK/Euro Financial Market Daily Evening Briefing 14-11-2007

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London shares close firmer; NY up; miners gain after Lonmin's results

At close, the FTSE 100 index was up 69.7 points at 6,432.1, off a high of 6,460.8, while the FTSE 250 index was ahead 150.7 at 11,070.9.Volume was below average with 2.74 bln shares changing hands in 754,230 deals. Trading Central, a technical analysis service, sees key support levels at 6,120, 6000 and 5820, with resistance seen at 6,525, 6,750 and 6,960.
   
At London's close, the Dow Jones Industrial index was down 12.6 points at 13,298.6. Broader stock indicators were also lower. The Standard & Poor's 500 index fell back 0.51 to 1,480.54, while the Nasdaq composite index was down 9.49 to 2,664.16.
   
Turning to the UK blue chips, mining stocks jumped higher, boosted by rising metals prices and after bullish broker response to Lonmin's full-year results. The world's third-biggest platinum producer said earnings before interest and tax declined to 794 mln usd, from 842 mln the year earlier, but beat the market consensus of 790 mln usd.
   
"We see long-term value in the company from the development of Akanani (production range 250,000-700,000 oz) as well as the strong fundamentals of the PGM market," Citigroup said in a research note. Lonmin added 123 pence to 3,200 pence.
   
Its mining peers were also higher with Vedanta Resources up 82 at 1,969 ahead of results tomorrow, Antofagasta gained 42 at 745, Xstrata edged 138 higher at 3,388 and Kazakhmys was up 96 at 1,459. Oil stocks were higher, aided by a recovery in prices and on news that BP has made a major gas discovery in Azerbaijan's Shah Deniz field.
   
The well, known as SDX-04, located 70 km south-east of Baku, struck a "new high-pressure reservoir" in a deeper structure below the currently producing reservoir, BP said in a statement.
   
BP added 16-1/2 to 599-1/2, Tullow Oil was up 32-1/2 at 645-1/2, BG Group rose 23-1/2 to 982 and midcap sector peer JKX Oil & Gas leapt 13 pct, or 40-1/4 to 349-3/4. Also after earnings news, Scottish & Southern Energy rose 50 pence to 1,573 pence after announcing that adjusted pretax profit for the first half was up to 664.7 mln stg, from 466.5 mln over the same period last year, ahead of analysts' expectations.
   
In M&A activity, Unilever gained 27 at 1,767-1/2 as the Anglo-Dutch group said it has sold its Lawry's and Adolph's brands in the US and Canada for what SNS described as a "huge" price-tag.
   

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And, in other financials HSBC climbed 23-1/2 at 866 thanks to its reassuring update on its sub-prime exposure. The bank responded to the rumours saying it knows no reason why its shares fell more than 6 pct in midday trade, and said it is still successfully raising funds when needed and is continuing to buy back its own shares.
   
And, Sainsbury, the supermarket chain that was the subject of two aborted takeover approaches this year, gave up early gains to trade 12-3/4 lower at 413 pence.  Investors were disappointed by the group's ongoing resistance to plans to split the business into separate operating and property companies, despite renewed pressure from investor Robert Tchenguiz.
   
This overshadowed first-half profits that were at the top end of market expectations. The company also announced a joint venture with Land Securities, down 23 at 1,545, to unlock development value from 113 mln stg of freehold assets.
   
However, Landsbanki said that the announcement of a property joint venture with Land Securities this morning will heighten hopes that huge amounts of value are about to be unlocked, but sadly, this is not the case.
   

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The broker reiterated its 'reduce' stance. It said it plans to demerge into three separately-quoted companies which will reflect its three main business streams: retail property, the London property market, and its property outsourcing business Trillium.
   
Lands Securities also revealed that its interim pretax profit fell to 375.2 mln stg from 1.2 bln previously, which it said was as a result of a smaller valuation surplus. KBC Peel Hunt cut its rating to 'hold' from 'add'.
   
Elsewhere, Wolseley fell back 7-1/2 at 711-1/2 after Morgan Stanley assumed coverage on the group with an 'equal weight' rating and a 650 pence target on the likelihood of continued negative earnings momentum, with no signs of recovery until the end of 2008.
   
Among the midcaps, Minerva was the top riser, up 30-1/2 at 196 amid vague rumours the property developer will tomorrow confirm market suspicions of stake-building in the company.
   
Meanwhile, Balfour Beatty was up over 8 pct, or 37-1/4 pence, to 488-3/4 as its more ambitious full-year forecast prompted ABN Amro to lift its rating to 'buy' from 'add'. 
   
UK Diary of Events:

For a diary of key financial and corporate events in the UK this week, click here

UK Small Cap Report:

For a summary of today's trading on the FSTE 250 and AIM, go to click here

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Paris shares close up sharply as overnight US rebound sparks bargain-hunting

PARIS - Share prices closed sharply higher as yesterday's spectacular rebound on Wall Street, driven by stronger-than-expected earnings from Wal-Mart and reassuring comments from Goldman Sachs, prompted
widespread bargain-hunting after heavy losses last week, market sources said.
   
The CAC-40 index finished up 74.69 points or 1.35 pct at 5,613.60. Among CAC-40 stocks, 35 closed higher, 1 ended unchanged and 4 closed lower. On the Matif, November CAC-40 futures were trading at 5,620.
   
On the broader indices, the SBF-80 index closed up 94.67 or 1.45 pct at 6,603.21 while the SBF-120 ended 54.91 or 1.36 pct higher at 4,082.24. The euro was at 1.4664 usd compared to 1.4590 usd late yesterday.

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German shares close slightly higher led by banking and tech stocks

The DAX was up 5.55 points or 0.07 pct at 7,783.11 points after trading between 7,765.51 and 7,866.01.The MDAX gained 125.21 points or 1.27 pct to 10,0012.42 while the Tec DAX advanced 18.78 points or 1.94 pct to 988.26.
   
DAX futures lost 66.50 points or 0.84 pct to 7,815.50 while bund futures fell 0.02 points or 0.02 pct to 114.13 points. The euro was trading at 1.4676 usd against 1.4694 usd in London midafternoon trade.
  
Hypo Real Estate, up 1.32 eur or 3.58 pct at 38.22 eur, led the DAX30 along with some financial stocks after Goldman Sachs chief executive Lloyd Blankfein said yesterday the bank does not anticipate further write-downs relating to the sub-prime credit crisis.
   
Presenting at the Merrill Lynch Banking and Finance Conference in New York yesterday, Blankfein said he expects no further significant costs tied to the drainage of demand from certain markets, including bonds backed by mortgages. Deutsche Bank was up 1.18 eur or 1,39 pct at 86.08 while Allianz gained 1.31 or 0.91 pct to 145.98.

Infineon was the second best performer, adding 0.25 or 2.70 pct to 9.50, after it disclosed fourth quarter figures which showed its Automotive, Industrial and Multimarket segment as well as the Communication Solution segment performing better than what the market had expected. Dealers said shares were also higher because the chipmaker did not issue a profit warning as was feared by some investors.
   
On the downside, RWE lost 5.67 or 6.01 pct to 88.68 after the company announced it was delaying the IPO of American Water and the cancellation of a share buyback programme. Over on the MDAX, Arques Industries gained 1.57 or 7.03 pct to 23.91. Premiere fell 0.36 or 3.17 pct to 10.98. JP Morgan initiated the stock with a neutral rating and a 12.90 eur per share price target.
   
Salzgitter rose 5.34 or 4.53 pct to 123.34 after it released largely positive third-quarter numbers included a slightly better-than-expected bottom line. Hochtief was up 3.19 or 3.72 pct at 89.00 unveiling consensus-beating third quarter bottom line even though its sales increased by a lower amount than the market had anticipated.
   
Stada Arzneimittel, also reporting today, lost 1.14 or 2.68 pct to 41.47 after analysts said the market was worried about statements the company could launch a capital increase to fund acquisitions. On the TecDAX, Ersol lost 3.53 or 4.77 pct to 70.50 while United Internet gained 1.31 or 8.52 pct to 16.69.

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Amsterdam shares close higher on Wall Street gains; Fortis leads

The AEX closed 4.43 points or 0.87 pct higher at 512.32 after trading in the range 510.53-515.67. Government bonds traded lower while the euro stood at 1.4673 usd versus 1.4590 usd late yesterday.
   
Fortis led blue-chips, adding 2.06 pct to 18.36 eur, as analysts said that although it is painful to lose money in a crisis, they believe Fortis "can handle this". Among other financials, ING closed 0.84 pct higher at 27.21 after it said it has bought Argentine pension fund Origenes AFJP and annuity business Origenes Seguros de Retiro from Banco Santander and Grupo Bapro for 192 mln eur.
   
Aegon slipped 0.23 pct to 13.0 eur. ASML gained 1.99 pct to 23.09 eur, boosted by a read-through from solid results out at Infineon and following a report out at the Semiconductor Industry Association forecasting that global semiconductor sales would rise 3.8 pct over 2007 versus 2006. ASM International was 0.70 pct higher at 17.17 eur on the midcap.
   
Electronics giant Philips added 1.73 pct to 29.40 eur, while steel behemoth ArcelorMittal gained 1.59 pct to 49.81 eur as the group presented third-quarter earnings results which came in above expectations.
   
On the midcap, Van Der Moolen surged 10.54 pct to 3.67 eur ahead of its third quarter results tomorrow, while Fugro added 1.93 pct to 58.0 eur as brokerage ING raised its price target to 67.50 eur from 57 eur while maintaining its 'buy' recommendation.
  
Nutreco gained 1.48 pct to 43.74 eur as analysts said the animal nutrition company is not impacted by the same higher raw material costs faced by French peer Provimi, which reported nine-month results yesterday that were impacted by "modest" margin pressures.
   
Brewer Heineken led decliners, shedding 1.13 pct to 46.34 eur. Earlier Switzerland's Kuehne & Nagel International AG said its unit KN Drinks Logistics has been awarded a contract by Heineken to carry out imports from Europe and primary distribution in the UK.
   
Hagemeyer dropped 1.07 pct to 4.62 eur and KPN shed 0.63 pct to 12.52 eur.  On the midcap, Wereldhave fell 2.57 pct to 74.62 eur.

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