European stock markets were mixed on Monday, helped out slightly by a higher opening on Wall Street, and a good report from Dow Jones Industrial Average component American Express. Oil prices came off highs, but were still up from Thursday last week, capping enthusiasm both in Europe and the US. In London, the Financial Times-Stock Exchange 100 gained 9.20 points, or 0.19%, to close at 4812.50. At home, banks and pharma weighed the FTSE down, while the mining and oil and gas sectors offered some gains. Shire Pharma tumbled 1.88% after a drug it had been distributing on behalf of U.S. company Johnson & Johnson, Reminyl, was placed under review following reported patient deaths. Rio Tinto was the best performer after JP Morgan raised its target price and others in the sector on the back of higher commodity prices. Among trading updates issued today, Emap (-1.22%) said it expects to meet fiscal year expectations and described current UK consumer magazines circulation and advertising as good.
Germany's DAX lost 11.81 points, or 0.28%, to close at 4201.89. Oil prices were volatile in New York trading. Locally, HVB and Infineon were the main decliners: The former as a result of a flurry of broker downgrades while the latter reported its earnings and sales will continue to dip in the second quarter of 2005. The bad news from Infineon's first-quarter report was that its SMS division is expected to decline further in second-quarter and, given that SMS only made a 2 million euro EBIT in the first quarter, brokers think the unit could slip into losses this quarter. Elsewhere, ThyssenKrupp went ex dividend, while Karstadt dipped after saying it is to sell part of its logistical operation to Deutsche Post without providing any terms. Lufthansa eased on upward pressure in oil prices during European hours while Deutsche Boerse remained in focus as it is reportedly close to making a second unsolicited offer for LSE. CSFB downgraded HVB to neutral from outperform. UBS upgraded Siemens to to buy. Puma benefited from a UBS upgrade.
In France, the CAC-40 lost 5.48 points, or 0.14%, to close at 3848.71. In Paris, tech stocks remained lower, following weak guidance from Germany's Infineon. STM and Alcatel lost 2.57% and 1.96% respectively. On the mergers and acquisition front, France Telecom is to buy the 46% stake it does not already own in Equant. Carrefour bucked the bearish trend as Morgan Stanley said it is its preferred play in the food retail sector. The shares also benefited from hopes of more radical change as the Financial Times reported the Halley and March families, who control about 16% of the retailer, are putting pressure on chairman Daniel Bernard. Elsewhere, EADS was in play as the French transport ministry reportedly said Airbus would this week announce the sale of five A380 to China Southern. Air France was weighed down 2.32% by oil prices. The airline was also in focus because of talks with Cinven and BC Partners regarding sale of the stake in Amadeus.
Asian markets were mixed on Monday. In Japan, the Nikkei 225 gained 51.12 points, or 0.45%, to close at 11,289.49, benefiting froom gains in banking stocks and construction names. But the index's gain was limited by losses in technology stocks such as Sony Corp and Elpida Memory. Elpida said after the market close on Monday it posted a third-quarter group net profit of 3.39 billion yen versus a 9.76 billion-yen loss and an operating profit of 5.64 billion yen (versus 9.06 billion-yen loss). But the world's number 5 DRAM chip maker cut its 2004-2005 (ending March) net profit target to a range of 12 billion yen to 16 billion yen, down sharply from its previous estimate of 21.6 billion eyn.
In Hong Kong, the benchmark Hang Seng Index dropped 94.03 points, or 0.70%, to close at 13,386.99, with properties leading losses. But Lenovo Group outperformed the market on news that the company's planned acquisition of the PC segment from IBM might be held up by U.S. regulators. Shares of the Chinese PC maker had been hit in recent weeks as analysts questioned the value of the IBM deal.
Canada's benchmark TSX/S&P lost 8.63 points, or 0.10%, to close at 9,078.20.