UK/Euro Financial Market Daily Evening Briefing 15-08-2007

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London shares finish weaker but off lows

Leading shares fell for a second day, but finished off their lows for the session, as Wall Street shares recovered ground lost earlier in the US session.
   
At the close, the FTSE 100 index was down 34.2 points at 6,109.3, compared with a low for the session of 6,041.7. The FTSE 250 index ended the day 109.2 lower at 10,889.4. Volume was robust, with 2.89 bln shares having changed hands in 646,997 trades.
   
The Dow Jones Industrial Average was down just 0.2 points at 13,028.7 as the London markets were closing.

FTSE 100 risers

Persimmon 1,256 up 45
  
Barratt Developments 945 up 25-1/2
     
ITV 106.20 up 2.10
   
Scottish & Newcastle 593 up 13
   
Unilever 1,511 up 26
  
British Land 1,214 up 14
   
Imperial Tobacco 2,118 up 21

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FTSE 100 fallers

Northern Rock 687-1/2 down 38-1/2
 
Intercontinental Hotels 1,049 down 40
  
British Energy 454 down 13-1/4
   
Man Group 482-1/2 down 12
   
Standard Chartered 1,562 down 36
   
British Sky Broadcasting 659 down 11
   

  
FTSE 250 risers

Kesa Electricals 297-1/4 up 7
  
National Express 1,156 up 18
   
Invensys 344-1/4 up 4-3/4
  
   
FTSE 250 fallers

Bluebay Asset Management 386 down 16-1/4
  
Arriva down 749 10
  
FKI 95-1/4 down 2-3/4
   

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Other risers

Carter & Carter Group 101 up 11
   
DiamondCorp 103 up 8
  

Other fallers

World Trade Systems 9-1/2 down 6
 
Oxford Instruments 236-1/4 down 32-1/4
  
XTL Biopharmaceuticals 7.875 down 1.125
 
Western Canadian Coal 88-1/2 down 11-1/2

UK Small Cap Report

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UK Diary of Events

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Paris shares close down as credit concerns, exposure fears still dominate

The CAC-40 index closed down 35.94 points or 0.66 pct at 5,442.72, recovering late in the session from a midday dip below 5,400, after the US market opened and showed slight gains. There were 32 decliners and 8 gainers.
   
There was little on the domestic scene to influence the market as today was a French public holiday.
   
Among the main blue chip decliners, Air France-KLM dropped 0.81 eur or 2.74 pct to close at 28.70. The stock has been volatile in recent weeks amid speculation about its potential involvement in a bid for Alitalia. Separately, a Dutch newspaper said today that its cargo unit was denying charges of racial discrimination.
   
Steel shares also underperformed, with pipe maker Vallourec closing down 5.26 eur or 2.74 pct at 186.65 and ArcelorMittal closing down 0.61 eur or 1.42 pct at 42.20.
   
Banks and insurance shares continued to come under pressure from the global credit and subprime concerns. Societe Generale led the financial sector lower, dropping 2.73 eur or 2.29 pct to 116.27, although its Lyxor Asset Management unit denied yesterday's rumours of losses in its funds. Those rumours fuelled a 4.59 pct fall in SocGen's stock yesterday.
   
"There are suspicions surrounding all the banks," said one Paris-based dealer, arguing that it is "too early" to resume buying banking stocks.
   
BNP Paribas finished down 1.13 eur or 1.45 pct at 77.05, and Credit Agricole ended down 0.19 eur or 0.70 pct at 26.84.
   
Insurer Axa closed with a loss of 0.33 eur or 1.15 pct at 28.49. It was downgraded to 'neutral' from 'outperform' by Credit Suisse, with a reduced target of 33.5 eur from 36.5, following last week's first-half earnings.
   
PagesJaunes closed down 0.31 eur or 2.14 pct at 14.19, after Goldman Sachs downgraded it to 'sell' from 'neutral' on valuation grounds, as part of a media sector review in which the broker cut ratings across the board.
   
BioMerieux dropped 0.75 eur or 1.15 pct to close at 64.25, after Goldman Sachs added the diagnostics group to its 'Conviction Sell' list in the expectation of slowing merger and acquisitions activity in the sector, according to market sources.
   
Among the blue chip gainers, Capgemini jumped 1.77 eur or 4.04 pct to close at 45.63, as shares in IT and computer stocks were generally higher.
   
France Telecom closed up 0.26 eur or 1.26 pct at 20.90, holding gains it posted early in the session. The newspaper Le Figaro said its Orange mobile phone unit has won the rights to market Apple's iPhone in France.
   
Property stocks were steady amid the broader decline, after posting some of the sharpest drops in recent sessions due to the subprime lending woes. Unibail-Rodamco closed up 0.03 eur or 0.02 pct at 171.63, and Kaufman et Broad finished up 0.02 eur or 0.04 pct at 50.19.

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German shares close higher as Wall Street gains offset earlier losses

The DAX closed 20.83 points or 0.28 pct higher at 7,445.90, having traded between a low of 7,343.25 and a high of 7,470.94 today. The MDAX was off 152.10 points or 1.51 pct to 9,951.12, while the TecDAX eased 11.27 points or 1.28 pct to 872.32.
   
DAX futures were up 23.00 points or 0.31 pct at 7,473.00, while bund futures added 0.27 points or 0.24 pct to 112.96.
  
Bayer lead blue chips higher, gaining 2.87 eur or 5.49 pct to 55.13, on vague rumours that Swiss competitor Novartis is considering a 70 eur per share bid for the German company.
   
"Novartis is perpetually rumoured to be buying something whether it's AstraZeneca, GlaxoSmithKline or Aventis," said Michael Leacock, analyst at ABN Amro. "But to be frank, I would be surprised if Novartis were thinking of materially acquiring Bayer."
   
Lufthansa followed, rising 0.31 eur or 1.56 pct to 20.22. MAN added 1.56 eur or 1.55 pct to 102.30.
   
EON ascended 1.36 eur or 1.16 pct to 118.56 after releasing first-half results in-line with consensus even though its second quarter net profit fell 18 pct to 901 mln eur on the back of a decline in gas and retail prices in key European markets.
   
Peer RWE gained 0.77 eur or 0.96 to 81.04 as yesterday's positive momentum following a Merrill Lynch upgrade to 'buy' continued.
   
Meanwhile, Deutsche Boerse fell to the bottom of the index, declining 2.20 eur or 2.66 pct to 80.49. Traders attributed the drop to technical trading grounds after the stock crashed through a resistance barrier at 81.60 eur.
   
Hypo Real Estate was down 0.97 eur or 2.43 pct to 39.02 due to continued sub-prime woes.
   
Postbank lost 1.20 eur or 2.21 pct to 53.08, while Deutsche Bank declined 0.90 eur or 0.95 pct to 93.43 on similar grounds. Merck was also lower, down 2.10 eur or 2.24 pct at 91.74.
   
Over on the MDAX, Gagfah added 0.25 eur or 1.79 pct to 14.25 as the biggest of only five gainers, while at the other end Kloeckner & Co fell 2.88 eur or 6.22 pct to 43.40 after releasing below-consensus second-quarter results.
   
TecDAX-listed Pfeiffer Vacuum rose 1.52 eur or 2.31 pct to 67.19, while Solon dropped 2.49 eur or 4.72 pct to 50.21.

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Amsterdam shares end lower; CSM falls

The AEX closed 2.39 points or 0.47 pct lower at 506.04, after trading in a range of 501.27-507.60. Government bonds traded higher while the euro stood at 1.3477 usd versus 1.3577 usd late yesterday.
   
CSM fell 7.61 pct to 25.13 eur, after the company's first-half earnings missed estimates and said that it won't meet its strategic targets until sometime in 2009, instead of 2008.
   
On the AEX, blue chips were led by food and beverage sector shares. Unilever rose 1.74 pct to 21.60 eur after market peer Nestle presented better-than-expected earnings. Heineken led gainers, adding 2.67 pct to 44.54 eur, and Numico rose 0.24 pct to 53.43 eur.
   
KPN continued yesterday's gains, adding 1.06 pct to 11.52 eur, while Royal Dutch Shell added 1.03 pct to 27.38 eur and TNT put on 0.76 pct to 30.43 eur.
   
Most staffing shares with a large exposure to the Dutch staffing market were down. USG People dropped 2.11 pct to 24.15 eur after Citigroup cut its price target on the stock to 35 eur from 40, while maintaining its 'buy' recommendation.
   
Randstad shed 1.93 pct to 43.71 eur. Vedior, which is less exposed to the Dutch market, gained 0.57 pct to 17.78 eur.
   
Financials lost. ING shed 1.88 pct to 28.98 eur, while Fortis shed 1.19 pct to 26.47 eur after the RBS consortium, of which Fortis is a member, said that it would not lower its takeover bid on ABN Amro after the latter raised its dividend. ABN Amro dropped 1.60 pct to 33.87 eur.
   
Corporate Express shed 3.04 pct to 8.92 eur and ASML led decliners, shedding 3.09 pct to 20.36 eur.
   
Among midcap shares, SNS Reaal dropped 2.89 pct to 14.76 eur ahead of earnings tomorrow, while Wessanen shed 2.98 pct to 11.07 eur. Aalberts dropped 3.47 pct to 18.10 eur after presenting in-line earnings, while some analysts voiced concerns about the US market for Aalberts.
   
There were few gainers. Getronics added 0.49 pct to 6.11 eur, LogicaCMG rose 0.88 pct to 2.29 and Nutreco added 1.74 pct to 54.50 eur.

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