Major European stock indexes finished with modest gains in Tuesday's session. Earlier strength ebbed as U.S. stocks turned mixed after a fresh rise in oil prices. West Texas Intermediate crude oil was up over US$1 per barrel as the International Energy Agency forecast demand growth will quicken to 1.75 million barrels per day in 2006, after it lowered demand growth estimates for 2005 to 90,000 bpd.
Germany's Xetra-Dax index ended modestly higher Tuesday. Among German stocks on the move, VW (+0.08%) says it will remain independent from Porsche (-0.4%) in its decision making process, adding that cooperation with third parties is not affected by Porsche's latest stock buying transactions. Munich Re (+2.09%) and Hannover Re (+1.23%) were higher after positive sector comments from JP Morgan. UniCredito's takeover of HVB (+1.58%) will be completed in January, reports Handelsblatt, citing an internal letter to employees. MAN (+0.27%) has sold its MAN Heiztechnik business to the unit's management and Hamburg savings bank Haspa. The business had sales of some €40 million last year.
Postbank (-0.24%) may have its credit rating cut by Moody's on the back of parent company Deutsche Post (+0.3%) looking to buy the UK's Exel. Premiere (-0.48%) plans to acquire sport channel DSF from EM-TV (+4.3%) for as much as €200 million, Rheinische Post reports. EM-TV says nothing is in the works on that front.
In the UK, the FTSE 100 index came dramatically off earlier highs to close just 6.2 points higher, weighed down by another rise in crude oil prices. Marks & Spencer (+3.45%) was among the best performers, following a better than forecast second quarter sales report. The retailer unveiled its first positive sales in 8 quarters and said first half profits would be at the top end of market expectations.
Luxury group Burberry (+0.30%) announced a management reshuffle, with Rosemary Bravo set to take the new post of vice chairman. Home shopping group N Brown (+11.28%) rallied after announcing a 45% increase in interim profits. Airport group BAA (+0.40%) says September passenger figures rose 3% to 13.50 million, in line with analysts' forecasts.
Among commodity outfits, Xstrata (-0.49%) was in focus after news that Falconbridge (FAL), where the company holds a 19% stake, has agreed to a friendly bid from Inco (N). Firm copper prices supported Antofagasta (+2.46%).
In France, the CAC40 index ended slightly higher on Tuesday as Wall Street struggled to hold on to opening gains. Breadth was 25-15 positive, with energy and banks propping up the index. Accor (-1.26%) slipped after appointing Serge Weinberg as new chairman and Gilles Pelisson as chief executive in a compromise between feuding factions on the board, the FT writes. BNP (+0.63%) was lifted by news of imminent expansion in China. The bank is said to be looking to take as much as 19.7% of China's Nanjing City Commercial Bank. Valeo (-1.99%) slipped on the back of Delphi's bankruptcy filing in the U.S. Havas (+2.20%) was boosted by reports the CEO of UK's Aegis is open to a partnership with the French ad agency.
Among Tuesday's broker actions, Deutsche Bank lifted it target for Credit Agricole (+1.62%) and BNP reiterated its buy rating. For Credit Agricole, BNP believes consensus estimates will have to rise substantially. UBS downgraded Cap Gemini (+0.32%) to neutral from buy; and upgraded Atos (+0.68%) to buy from neutral. Lehman raised its target for CNP (+0.98%) to €67.0 from €61.0; overweight.
A reweighting of the CAC40 index will take effect at the close of business Tuesday, with Suez's (+0.34%) weight expected to rise to 3.32% from current 3.022%.
Looking ahead, investors will weigh the release of the minutes from the September FOMC meeting, and earnings from Apple (AAPL) and AMD (AMD) after the U.S. close Tuesday.