From Standard & Poor's European MarketScope
Major European indexes closed higher, but off top levels following comments from European Central Bank president Jean-Claude Trichet that the bank is ready to moderately increase interest rates. His words were seen as a clear indication that rates will go up in December, prompting a spate of profit taking. Lower crude prices helped matters for energy-price sensitive companies.
United Kingdom: The FTSE 100 index closed off its best levels of the day, just under the 5,500 mark. In London, the index traded as high as 5,531.6, its highest level since August 2001 in the morning, propelled by strong oil and mining shares. Miners gained on the back of gold prices near 18-year highs and copper prices at new records. The sector was further buoyed by several target price upgrades by UBS. BHP Billiton (+0.93%), Rio Tinto (+1.39%) and Antofagasta (+1.99%) rose.
Oil stocks remained strong despite crude prices slipping below the US$57 mark. British Airways (-0.32%) ended in the red in volatile trade. The stock soared in the morning, on bullish broker comments. GUS (-0.23%) said it will carry out an 860-for-1000 share consolidation at the same time as the demerger of Burberry (+2.55%) on 13 December. ukbetting (-5.75%) plummeted after saying group EBITDA for 2005 would be towards the lower end of the range of current market forecasts. The group said fiscal year revenues will exceed the top end of the range of current market estimates.
Germany: The Xetra Dax index pared gains in the late afternoon after hitting a fresh three-and-a-half year high in the morning. In Frankfurt, Bayer (+0.88%) climbed after it received an upgrade and price target increase at Dresdner KW. Infineon (+0.63%) gained on a narrower-than-expected fourth quarter EBIT loss, although only in-line sales capped the excitement. The CEO said he expects at least 6%-8% sales growth in 2005-06 although he made no profit forecasts for this quarter or for the full year.
DaimlerChrysler (DCX)(+0.51%) said the sale of its 12.4% stake in Mitsubishi Motors is complete and will help earnings by €501 million in 2005, confirming an earlier estimate. The auto giant said it received proceeds of €970 million from the disposal. Commerzbank (-0.37%) was dished a whole plate full of broker upgrades and target changes following the Eurohypo transaction. In M&A action, Merck (MRK)(+0.82%) bought Danish-based Survac for €11 million to gain access to cancer vaccine technologies. On the data front, October producer prices in Germany rose the most in six months.
France: The CAC 40 (+0.73%) ended the week on a positive note but off the day's highs, with a breadth 33-7. In Paris, the chairman gave LVMH (+0.84%) a boost by stating second half net earnings growth will be positive thanks to buoyant demand and a weaker euro. Lagardere (+2.46) reacted to the news that it is close to reaching a deal with Vivendi (V)(-2.29%) on CanalSat. Reinsurer Scor (+3.64%) jumped after Swiss Re said it will buy GE Insurance Solutions for US$6.8 billion, Axa (AXA)(+1.72%) was also marked higher.
Soc Gen's (+0.86%) share price touched a new high at €101.00, helped by brokers' upgrades. BNP (+1.13%)and Credit Agricole (+0.72%) also ended higher. STM (STM)(+1.09%) was helped by peers Hewlett-Packard and Infineon posting positive earnings reports. Alcatel (ALA)(+2.02%) held an investor forum in Paris. EdF's stock was priced at €33, top of the indicated range, ahead of its Paris bourse debut on Monday.
Elsewhere: The SMI (+1.38%) reached its highest point in more than four years, helped by a rebound in index heavyweight Roche (+2.07%) after steep losses yesterday. Several brokers argued that concerns regarding the side effects of the company's Tamiflu were overdone. Swiss Re (+1.24%) grabbed attention after it announced the acquisition of GE Insurance Solutions for US$6.8 billion in cash and stock. Prepared by Zaida Espana, Valerie Vidal, Michael Sanderson, Mariella Mongio, Alexander Wisch, Holly Cook, Emma Stevenson, Pawan Girglani, Julien Manrique, and Rocio Opazo-Aniotz (Standard & Poor's); Alex Halperin (BusinessWeek Online)