From Standard & Poor's European MarketScopeMajor European equity indexes ended mixed Monday. In New York, investors welcomed better-than-expected US leading indicators and restructuring at GM. WTI crude oil bounced back, trading at US$57.50 per barrel on concerns over dropping temperatures later this week. The news hit airlines but boosted oil stocks. M&A activity was the talk of London and Paris.
United Kingdom:The FTSE 100 was the only major European index not to show gains today, weighed down by Glaxo (GSK)(-3.87%). In London, Glaxo was the main hit to the FTSE, after the FDA proposed tough new restrictions on its biggest-selling asthma drug. Vodafone (VOD)(-1.56%) fell after saying it plans to issue a 7-year eurobond. Cadbury Schweppes (-0.44%) said it received a £1.27 billion binding offer for its European beverages business.
Oil stocks tracked firmer crude prices on expectations of a cold snap in the northern hemisphere. BP (BP)(+1.48%) and Royal Dutch Shell (RDS)(+1.21%) gained. Media group Aegis (+5.60%) rallied on reports that WPP (unch.), Bollore and Hellman & Friedman discussed the possibility of a joint bid for at least US$2.78 billion. Empire Online (+8.66%) bounced back with a vengeance as the market bet on another possible bidder, after the group rejected PartyGaming's (+1.02%) 60p per share offer. Empire said it will take legal action in relation to damage caused to it by the changes to the PartyGaming platform. Computacenter (+16.08%) confirmed it received a preliminary proposal, from a group led by a co-founder and non-executive director Peter Ogden.
France: The CAC 40 index (+0.66%) closed just off the day's highs, led by oil giant Total (TOT)(+1.53%) and a re-rating of banking stocks. Alcatel (ALA)(-2.08%) recorded the CAC 40's worst performance, on unconfirmed reports that it is mulling a £5 billion bid for Thales (+3.48%). Banking stocks extended gains after last week's in-line earnings and brokers upgrades: BNP Paribas (+0.97%), Soc Gen (+0.60%) and Credit Agricole (+1.93%) all advanced.
On the M&A front, Vincent Bollore, chairman of Havas (+1.82%) was reported to have discussed with other Aegis bidders the possibility of a joint offer of at least £1.62 billion, and Euronext (+0.51%) was said to be considering a share-swap merger with LSE. IPO EdF (unch.) started its first trading day at €32.39 and spent most of the session trading near the retail issue price of €32, the day's low. EADS (+0.47%) announced a raft of contract wins at the Dubai Air Show. Meanwhile, TF1 (-0.98%), which reports nine months results tomorrow night, saw S&P Ratings Services lower its outlook to negative from stable.
Germany: The Xetra Dax index closed higher after news from the US provided a late push. Locally, economic news was also supportive as the IW economic institute raised its 2006 GDP growth forecast for the second time in six weeks. Among the stocks, E.On (EON) (+1.82%) was well bid as its Hanse division said it will raise retail gas prices by 0.51 cents per kilowatt hour (Kwh) from the beginning of next year. Linde (+1.27%) secured its largest individual order ever for air separation plants in a contract worth over €300 million.
DaimlerChrysler (DCX)(+2.22%) was higher as Automobilwoche reported the carmaker is in talks with Bremer Immobilien-Holding Zechbau and a Nordic bidder about selling its investment unit. Munich Re (+1.8%) comforted investors with the issuance of a €110 million catastrophe bond to help cover losses in case of future Western European windstorms. Among fallers, Infineon (-0.75%) was hit by a report in Der Spiegel, saying that it could face further fines in relation to price fixing in memory chips. Lufthansa (-0.35%) fell on fears of competition after the US and the EU agreed last week to end restrictions on where airlines can fly. However, the loss was narrowed by a late afternoon announcement of another fuel surcharge.
Elsewhere: In Spain the Ibex 35 (+0.8%) traded barely above breakeven at the close. Oil prices put pressure on Iberia (-2.69%); while Repsol (+2.73%) was stronger. The oil group also benefited as news Evo Morales, front-runner in the Bolivian presidential elections, said he will not confiscate gas assets if elected.
Nordic markets came off highs in afternoon trade, but still ende 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)