European stock markets were lower Monday. In London, the Financial Times Stock Exchange 100 lost 10.40 points, or 0.21%, to close at 4973.20. The FTSE closed lower and Friday's profit warning from Ford dampened sentiment. At home, oil stocks continued to weigh on the index as WTI traded below $53 per barrel. On a quiet day for corporate earnings, the focus turned to M&A activity. Leading the rumour mill was news the Royal Bank of Scotland is considering a substantial investment in the Bank of China. The Financial Times said RBS is prepared to pay up to $4 billion for a 20% stake in Bank of China, but DrKW believes the UK group has neither the appetite nor the capital for such a move. The FT also reported Cadbury Schweppes is exploring a 750 million pound sale of its European beverages arm with a number of private equity firms said to have been in contact. Boots topped the FTSE 100 on news that former healthcare chief Barry Clare may be leading a bid for the BHI division, the Sunday Telegraph reported. Sainsbury sells five Homebase stores to British Land for 52 million pounds. Finally, Tesco rose on positive sentiment ahead of tomorrow's fiscal year results.
Germany's Dax lost 6.67 points, or 0.16%, to close at 4396.09 Frankfurt's main stock indices closed slightly lower in a session noted only for the narrow trading range and low volumes. Only a paltry 81 million shares traded today, little more than half of the usual daily volume. The Dax failed to hold above the 4,400 level but found few sellers to test support levels at 4,382. German auto stocks including VW and DaimlerChrysler suffered falls on the read across after Ford Motor cut its 2005 earnings estimates late on Friday. In addition, VW is among around 35 companies quoted on the Dow Jones Stoxx 600 Index to have had their forecasts cut. Earnings estimates have fallen 7.5%, according to a poll of 28 analysts surveyed by Thompson Financial. Metro fell after UK peer Tesco said it will expand in eastern Europe, threatening one of the German retailer's most profitable regions. Commerzbank remained the strongest performer today after Citigroup upgraded it to buy after saying the retail bank was visibly tackling problem areas. Handelsblatt quoted Lufthansa CFO Kley as saying that the airline will be seeking further acquisitions after completion of Swiss International Airlines. Infineon fell after an Elpida profit warning.
In France, the CAC 40 lost 6.67 points or, 0.16%, to close at 4117.62. The CAC40 ended the session fractionally lower on Monday as advances in banks and industrial stocks managed to offset, for the most part, losses racked up by Sanofi and Total. Wall Street was trading flat as the effects of a profit warning from Ford countered improved optimism over lower oil prices. WTI trades at $52.65 per barrel. At home, Total dipped as the energy sector underperformed on weaker oil prices. Sanofi wiped 5.7 points off the benchmark as the launch of its Ambien drug received a setback after the FDA issued an 'approvable letter' for the new version of its sleep aid, pending the resolution of certain issues. In addition, CSFB downgraded the stock to neutral, noting that the shares of the drug giant had risen 15% year-to-date and now exceed its target price. EADS slipped. A European Union spokesperson denied a report it was offering to delay the payment of launch aid for Airbus's A350. Goldman Sachs initiated coverage of Arcelor with in-line.
Asian markets were lower on Monday. In Japan, the Nikkei 225 lost 129.11 points, or 1.09%, to close at 11,745.64. Tokyo's Nikkei 225 fell 129.11 points, or 1.1%, to 11,745.64 and the Topix closed 0.9%, or 11.18 points, lower to 1,190.12, its first day down in five. Elpida led semiconductor shares lower after it said net income was about 8.1 billion yen for the year ended Mar. 31. The company in January forecast profit to be between 12 billion yen and 16 billion yen. Advantest dropped 1.4% to 8,350 yen and Tokyo Electron fell 2.4% to 6,180 yen. Oil related counters slumped after crude oil lost 6.9% last week in New York. Teikoku Oil dropped 2.6% to 788 yen, Nippon Oil fell 2.5% to 774 yen and Inpex Corp fell 3.4% to 598,000 yen. This weekend's anti-Japan demonstrations in China pushed down companies that rely on sales in China. Protestors hurled rocks, bottles and eggs at the Japanese Embassy in Beijing to protest against Japanese textbooks, while protests were staged outside Japanese-owned department stores in Guangzhou and Shenzhen. Aeon temporarily closed some of its outlets after windows of a shopping center housing one of its Jusco stores were broken by Chinese protestors in Shenzhen, the Nihon Keizai newspaper reported. Aeon was 0.5% lower to 1,763 yen, Komatsu declined 3.1% to 796 yen and Nippon Steel lost 1.8% to 268 yen.
Hong Kong's Hang Seng Index fell 0.05%, or 6.79 points, to 13,659.93. Of the 33 Hang Seng constituents, 18 dropped and eight rose. Leading laggards were Denway Motors, Johnson Electric, and CITIC Pacific. S&P Equity Research is upgrading Cheung Kong Infrastructure to hold from sell following a rollover of our discount period and recent price weakness. We anticipate earnings quality to improve. Top HSI percentage gainers were Swire Pacific, China Unicom, and COSCO Pacific.
Canada's benchmark TSX/S&P gained 20.00 points, or 0.21%, to close at 9,643.72.