European stock markets were higher on Wednesday. In London, the Financial Times-Stock Exchange 100 gained 44.40 points, or 0.94%, to close at 4777.40. UK stocks steamed ahead, and there was continued M&A speculation affecting individual stocks with the oil & gas and banks sectors both strong. U.S. chain Home Depot is believed to be interested in bidding for Kingfisher, according to the Daily Mail. Intrigue still surrounds the London Stock Exchange, with Deutsche Boerse setting terms for its merger offer. Meanwhile, Euronext said it will make a rival offer for the LSE in the new year. Cairn Energy gained ground after issuing a poorly received drilling update last week.
Germany's DAX gained 26.89 points, or 0.64%, to close at 4241.28, having traded at a new high for the year after Wall Street pushed ahead on weaker oil and continued positive corporate news flow. The dollar was little changed following final GDP data showing the U.S. economy grew at a 4% annual rate, slightly above the 3.9% forecast. Dealers are optimistic that not much stands in the way of further gains before year-end, despite the closing of positions ahead of the holiday break. The trading session was characterised by low volumes with short bursts of trading activity among certain sectors. Pace setters on the Dax included Altana, which is seeking to boost commission income to 40% from previous target of 32%. Dealers said its Pantoprazol stomach drug could benefit after warnings were levelled at other prescriptive drugs. Car makers VW, BMW, and DCX rose on a technical bounce. Infineon gained 0.76% as comments from CEO Ziebart reassured dealers over the company's medium-term strategy. Karstadt continued yesterday's upward correction.
In France, the CAC-40 gained 36.12 points, or 0.96%, to close at 3806.15. The CAC40 closed above the 3,800 level as Wall Street moves in positive terrain as oil falls on inventory data. Also providing support, the U.S. third-quarter GDP rose faster than expected, coming in at 4.0% versus the preliminary 3.9% reading. Locally, Enel's CEO, Paolo Scaroni, reportedly said there are no negotiations with France Telecom regarding a possible acquisition of Wind. Total benefited despite a price target downwards revision by Goldman Sachs and growing U.S. oil stocks. Sanofi-Aventis said it has repaid a 5 billion euro short-term credit line used to finance its Aventis takeover, and plans to refinance it with a revolving loan. Euronext's London ambitions seem to have come to an end as Deutsche Boerse has set merger terms for the LSE, combining the cash equities businesses of both into a single unit to be managed out of London.
Asian markets trended higher on Wednesday on the back of a rally in U.S. stocks overnight, with chip stocks getting a boost from Intel Corp's surge on Tuesday. Japan's Nikkei average rose 83.52 points, or 0.75%, to 11209.44, adding to 1.84% gains in the past three trading days. Chip-related stocks trended higher, with Advantest gaining 1.66% while Tokyo Electron edged up 0.65%. Pharmaceutical shares outperformed, with Yamanouchi Pharmaceutical up 1.32% while Fujisawa Pharmaceutical rose 1.32%.On the downside, Sanyo Electric sank almost 4% after the company said it expected a consolidated net loss of 71 billion yen for the year to March 2005, instead of its previous estimate of a 14 billion yen profit.
In Hong Kong, the benchmark Hang Seng Index was rangebound due to lack of catalysts. It lost 29.71 points, or 0.21%, to close at 14,151.08.
Canada's benchmark TSX/S&P gained 17.75 points, or 0.19%, to close at 9,255,23.