UK/Euro Financial Market Daily Evening Briefing 19-07-2007

£159,906 Profit from TradeWin's bespoke share trading software.
Click here to find out more.

London shares close higher, NY firmer; UK miners help fuel blue chips
 
London shares closed higher midafternoon as Wall Street remained firm after a slew of companies reported upbeat earnings, with UK miners helping to fuel the blue chips.
   
By the close, the FTSE 100 index was 73.1 points higher at 6,640.2 off a high of 6,658.8, while the FTSE 250 was also higher, up 154.2 points at 11,880.2.
   
Volume was heavy with 2.77 bln shares changing hands in 526,096 deals.
   
"We remain very heavily weighted towards UK equities as valuations remain reasonable, with earnings growth to continue in the mid to high single digit figures for the rest of the year. The world economy remains robust and, with strong Chinese GDP figures coming out today at 11.9 pct for Q2, demand for commodities is strong, which is helping the market," said Richard Batty, global investment strategist at Standard Life Investments.
   
Across the pond, Wall Street remained higher as investors, having gotten over a bout of economic jitters in the previous session, focused on mostly upbeat earnings reports.
   
Profit reports from companies like Honeywell International Inc, Bank of America Corp and Continental Airlines Inc helped push stocks higher.
   
By London's close, the Dow Jones Industrial Average index was up 76.8 to 13,995. Broader stock indicators were also higher. The Standard & Poor's 500 index was up 5.11 to 1,551.28, while the Nasdaq composite index rose 16.06 to 2,715.55.
   
Back to the UK, among the blue chips, mining stocks, also boosted by stronger copper prices overnight, continued to help buoy the blue chips, with Antofagasta the top riser up 37 pence to 725-1/2, Rio Tinto taking on 121 pence to 3,795, Kazakhmys up 31 pence at 1,377 and Anglo American up 102 at 3,202.
   
Positive broker comment helped Vedanta Resources move ahead 73 at 1,804, after HSBC reiterated its 'overweight' stance and upgraded its target to 2,100 pence from 1,800.
   
Meanwhile, bid talk helped Old Mutual, up 7.7 to 175.9, after a South African business newspaper said Standard Chartered may be looking to acquire South Africa's Nedbank, which is majority owned by Old Mutual.

You've probably heard about spread betting - but maybe the risks have put you off. The Finspreads Trading Academy, the most popular way into the world of spread betting, takes you through the whole subject from a keen amateur's point of view. So don't be startled by spread betting - get started. Click Here

BAE Systems was also a strong gainer, 19-1/4 pence firmer at 421-1/4, following overnight news that the Department of Justice has cleared its acquisition of Armor Holdings. Also adding to sentiment, the Pentagon said it has a 1.2 bln usd budget for new armour-protected vehicles.
   
In earnings news, Vodafone held firm, up 2.8 at 161.95, following its first quarter trading update and release of key performance indicators, prompting Nomura and Goldman Sachs to reiterate 'buy' ratings for the mobile telecommunications group.
   
The UK-based mobile operator said its customer base, on an underlying proportionate basis, grew by 9.1 mln in the three months to the end of June, buoyed by a strong performance in countries like Turkey and India. Nomura said volume growth was strong and Vodafone's promotional activities seem to be bearing fruit.
   
Goldman Sachs meanwhile said Vodafone's statement showed slightly better revenue growth than it had expected and an improvement in churn.
   
Elsewhere, William Morrison Supermarkets added 12-1/4 pence to 328 after saying today that like-for-like sales in the 23 weeks to July 15 increased by 3 pct, excluding fuel.
   
The company said sales growth has slowed slightly since it last reported at its AGM in May, reflecting tougher comparisons against last year, when the market benefited from the impact of favourable weather and the World Cup.
   
Merrill Lynch said Morrison's performance is a touch better than it had expected, as it was looking for flat like-for-like sales in the last eight weeks of trading.
   
On the M&A front, Whitbread took on 12 pence to 1,886, amid talk French hotel group Accor may be stalking the hospitality group. Accor were quick to deny any interest in its UK counterpart.
   
Boosted by positive broker comment were shares in Segro, up 12 pence at 589-1/4, with UBS upgrading them to 'buy' from 'neutral' after the stock's recent underperformance given investors' concerns over rising interest rates and return in the real estate market.
   
Turning to the fallers, a broker downgrade pushed Mitchells & Butlers lower, down 29 at 863.
   
Panmure Gordon said this morning that it believes the upside from the imminent freehold sale and return of 1.5 bln stg to shareholders is already reflected in the share price.

LOW-RISK, AWARD-WINNING, INVESTMENT STRATEGY
 
£2,000 to over £80,000 Tax-Free

Click Here

The broker feels this will leave the company too overleveraged for risk-averse investors and 35 pct overvalued relative to its peers. Adding that with trade slowing and the stock overhang growing, it downgraded its stance to 'sell' from 'hold'.
   
On the second line, a positive trading update helped Great Portland Estates move up 29 pence to 680.
   
Earlier today, the company said it was optimistic about prospects after a good start to the year and said its adjusted net asset value at June end rose 8.1 pct to 642 pence versus March 31.
   
The company said it sees continuing rise in rents, adding that its development business is powering ahead with a good pipeline. Its peer Shaftesbury was the top riser up 48 or 8.62 pct at 605.
   
And Venture Production was up 57 pence at 815-1/2, boosted by news 3i Group and ArcLight Capital Partners will invest over 200 mln stg in the company to give them each around a 9.9 pct stake and a seat on the board.
   
UBS reiterated its 'buy' stance and target of 900 pence and Merrill Lynch reiterated its 'neutral' view.
   
Elsewhere, shares in Dairy Crest pushed higher, up 24-1/2 pence at 722, after the company reported strong first-quarter trading and maintained its full-year forecasts in its AGM statement, with Citigroup retaining its 'hold' rating and 660 pence target.
   
On the downside, Aquarius Platinum slid 57 pence to 1,615, after its primary underground mining contractor Murray & Roberts Cementation dismissed 3,250 employees at the company's Kroondal and Marikana mines near Rustenburg, in South Africa. The company, however, said the operations at the mines remain unaffected.
   
And finally, Northern Foods was down 2 at 115-1/4 after Goldman Sachs trimmed its target to 114 pence and earnings per share estimates by 4 pct.

UK Diary of Events

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

UK Small Cap Report

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

£105,000 profit! spread betting UK shares with the Intelli-Trend system!
Click Here to find out more.

Paris shares close sharply higher on Wall St rebound, M&A talk

The CAC-40 finished up 69.53 points or 1.16 pct at 6,065.50. 38 CAC-40 stocks ended higher and two lower. The SBF-80 index ended up 64.09 or 0.89 pct at 7,264.81 and the SBF-120 closed 49.08 or 1.12 pct higher at 4,421.63. July CAC-40 futures were trading at 6057.50.
   
The most spectacular rise of the day was from Eramet, which ended up 18.73 eur or 9.18 pct at 222.73. The stock surged following a report in Les Echos this morning that Areva may take a majority stake. According to information obtained by the paper, Eramet's principal shareholder, the Duval family, is ready to sell its 37 pct stake to Areva, which already holds 26 pct of the nickel and manganese miner.
   
Eramet issued a statement late afternoon, saying it had nothing to announce to market and stressing that the press has speculated for a long time on possible changes regarding its shareholders and activities. But the statement only cooled slightly the speculative buying of the shares, which had risen as high as 133.50.
   
In a note to clients this morning, analysts at SG Securities said the story seemed credible, but kept a 'sell' rating on the stock, warning that "Areva is unlikely to make an offer to the Duvals at the current level."
   
In the CAC-40, Capgemini led the risers, adding 2.17 or 3.95 pct to 57.11 as speculation resurfaced that India's Infosys may be interested in the consultancy business following a report in the Times of India.
   
Elsewhere in the IT universe, Atos Origin and Business Objects were boosted by the speculation, respectively climbing 1.68 or 3.61 pct to 48.20 and 1.05 or 3.48 pct to 31.20.
   
The second biggest riser among blue-chips was Danone, which jumped 2.07 or 3.77 pct to 57.41 on speculation that PepsiCo is eyeing the French food group. According to the Wall St Journal, PepsiCo explored a merger with Nestle earlier in the year, and traders noted this would indicate the company is determined to enter the European market.
   
Other major CAC-40 risers included Peugeot, up 1.41 or 2.29 pct at 63.10, and STMicroelectronics, up 0.30 or 2.14 pct at 14.34.
   
Elsewhere, Sanofi-Aventis rose 0.69 or 1.12 pct to 62.26. Shortly before the close, the European Medicines Agency (EMEA) said it has recommended Sanofis weight-loss drug Acomplia (rimonabant) be contraindicated for patients with ongoing major depression or those taking antidepressants, because of the risk of psychiatric side effects.
      
Alstom added 2.62 or 1.95 pct to 136.67. The power and transport equipment group announced an order worth over 100 mln eur to supply a further 53 tram carriages to the city of Rotterdam.
   
Index heavyweight Total climbed 0.74 or 1.23 pct to 61.14, despite announcing that it has halved output at its Dalia oil field off the Angolan coast because of a problem with an electrical generator. Since Wednesday, the Dalia field has been producing 120,000 barrels of oil per day, down from 240,000 under normal conditions, the company said.
   
EDF  down 0.49 or 0.63 pct at 77.02  and Gaz de France  up 0.16 or 0.44 pct at 36.15 -- trailed the market as utilities remained affected by economic concerns.

..in St Lucia's UNESCO's World Heritage Site.  Superb buy to let opportunity in a breathtaking location with immediate income and dramatic capital appreciation.  For more information click here.

German shares close higher on higher Wall Street open; SAP leads gains

The DAX closed 97.60 points or 1.24 pct higher at 7,991.21 eur, after trading between 7,933.19 and 8,010.75. The MDAX was 105.17 points or 0.95 pct higher at 11,219.60 points, while the TecDAX added 15.91 points or 1.68 pct to 963.31 points. DAX futures were up 60.00 or 0.75 pct at 8,042.00, while bund futures slid 0.13 or 0.12 pct to 111.05.
   
On the macroeconomic front, producer prices in Germany rose 0.2 pct in June from May and increased 1.7 pct from June last year, the Federal Statistics Office said. Analysts said the numbers were largely in line with economists' expectations of a 1.8 pct rise and are seen as further evidence that a largely anticipated upcoming increase in ECB interest rates before the end of the year will take place.
   
On the DAX index, SAP rose 2.29 eur or 6.06 pct to 40.06 eur to lead blue chips higher after the software manufacturer announced positive second-quarter results this morning that largely beat expectations.
   
SAP's second-quarter operating profit rose 10 pct to 577 mln eur from 524 mln a year earlier, as software licence sales soared across all regions. Both Deutsche Bank and Citigroup reiterated their 'buy' stances and price targets at 50 eur per share after the results.
   
Continental was 3.57 eur or 3.39 pct higher at 108.81 eur as a report in the Frankfurter Allgemeine Zeitung said that unnamed managers at the tyre specialist might fear a takeover from Blackstone, should its takeover bid for Siemens VDO unit be accepted.
   
A spokesman for Blackstone declined comment on whether it might be interested in Continental and said that similar rumours had been around for weeks and that it was all speculation for the moment.
   
Siemens gained 3.01 eur or 2.85 pct to 108.66 eur as momentum started yesterday from reports that two companies are bidding for its VDO unit continued to boost the shares.
   
Fresenius Medical Care added 0.71 eur or 2.15 pct to 33.76 eur after the shares largely corrected from a long streak of declines, and as fears about impending negative effects from a lawsuit in the US may be ebbing, traders said.
   
Deutsche Boerse advanced 1.47 eur or 1.69 pct to 88.64 eur, perhaps as investors see the recent increased volatility in the German market as leading to higher turnover for the German exchange operator.
   
MAN rose 1.25 eur or 1.15 pct to 109.54 eur as a rumour that pointed to an unlikely scenario of a takeover by Swedish rival Volvo AB cooled off.    

At the other end of the DAX, Deutsche Post lost 0.15 eur, or 0.66 pct, at 22.70 as one of only two declining issues. BMW fell 0.19 eur or 0.40 pct to 47.77 eur.
   
Over on the MDAX, Deutz gained 0.55 eur or 6.04 pct to 9.65 eur after Credit Suisse said it has initiated coverage of the stock with an 'outperform' stance and a target of 12.00 eur per share. Wincor Nixdorf added 2.39 eur or 3.44 pct to 71.80 eur with several traders pointing to a 'hold' reiteration at Deutsche Bank for the ATM specialist ahead of its releasing its second-quarter figures next month.
   
At the lower end of the index, Premiere slumped 0.71 eur or 3.58 pct to 19.15 eur after the German pay-TV company slashed its full-year guidance due to regulatory problems that led to a hiatus in its marketing of Bundesliga soccer matches via satellite.

ADVFN Poker will match your first deposit up to $500. All you have to do is open an account with us, deposit money and play in our buzzing cash games or exciting tournaments. We will credit your bonus automatically! Play Now

Amsterdam shares close higher; ASML, midcap IT shares lead

The AEX closed at 560.25, 4.62 points or 0.83 pct higher, after opening at 559.25 and trading in a range of 557.79-561.17. Government bonds were mixed and the euro stood at 1.3817 usd versus 1.3815 usd late yesterday.
   
ASML led blue-chip gainers, closing 3.90 pct higher at 21.87 eur. This morning the group was given a price target upgrade at Theodoor Gilissen, and an upgrade to 'add' from 'hold' at Petercam followed, on the back of the upbeat outlook the company gave with its second-quarter figures yesterday.
   
Semiconductor sector peer ASMI also gained, closing 2.39 pct higher at 20.98.
   
Hagemeyer rose 2.96 pct to 4.18 with SNS Securities saying in a note to clients that comments at the group's peer Wesco about market circumstances it sees improving later in the year were "encouraging" for Hagemeyer.
   
TomTom outperformed throughout the day and closed 2.62 pct higher at 41.91 following a price target upgrade at Rabo Securities on higher sales estimates for the rest of the year, ahead of next week's second-quarter earnings.
   
SBM Offshore firmed 2.09 pct to 30.24 and KPN strengthened 2.10 pct to 12.16 while Unilever gained 2.35 pct to 23.97 on ongoing M&A speculation in the foods sector.
   
The soon-to-be de-listed Unibail-Rodamco was 1.92 pct stronger at 190.85 while among its real estate peers on the midcap index, Corio climbed 1.57 pct to 57.04 and Wereldhave declined 0.15 pct to 100.26.
   
Local real estate issue Vastned Offices/Industrial was also on the rise, gaining 1.86 pct to 26.32 eur amid news the company has acquired an office property in The Hague for 33 mln eur. Vastned Retail meanwhile added 1.13 pct to 62.85.
   
Fortis was the lead financial at market close, ending 1.11 pct higher at 30.03 while ABN Amrom, a bank Fortis has bid on in combination with a consortium, added 0.38 pct to 37.03. ING was 0.27 higher at 32.90 eur and Aegon was up 0.79 pct at 14.02, recovering from earlier losses on subprime mortgage market concerns.
   
Heineken led decliners, losing 0.87 pct to 45.67. Reed Elsevier closed 0.77 pct lower at 14.18 while peer Wolters Kluwer was 0.43 pct weaker at 23.20 amid news it has bought a US company called Technical Answer Group for an undisclosed some.

Closing Forex Rates

ADVFN Services