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European Indexes Gain

Back from the holiday, European indexes got a boost from Wall Street amid light news flow

From Standard & Poor's European MarketScope

European indexes gained Wednesday mirroring Wall Street. The DJIA added 0.63% to Tuesday's gains at the time of the FTSE 100 index close due to stronger-than-expected new home sales data and news that Ford (F) and Toyota (TM) held talks in Japan last week.


Blue chips rose throughout the session to end up by a comfortable 0.81%. The focus was on the Christmas retail newsflow. The number of shoppers at non-food retailers on Christmas Eve was down 26% year-over-year, a survey from SPSL revealed. According to the researcher, the busiest Christmas shopping day this year was Saturday Dec. 16: M&S (-0.28%); Next (-0.22%). Meanwhile, a report in The Daily Telegraph said Tesco's (+1.61%) Christmas sales online surged 30%.

In M&A news, Barclays (BCS) (+0.82%) confirmed the sale of about US$1 billion worth of shares in FirstCaribbean, as announced initially in June. Vodafone (VOD) (+0.35%) is facing more competition for Hutchison Essar, wrote The Sunday Times. Texas Pacific has joined the US$15 billion auction for the group.

Intercontinental (IHG) (+2.55%) jumped as much as 5% earlier in the session on market rumors about a potential £15.0/share bid from abroad. In the broader market, Moss Bros (+15.91%) is likely to receive a £80 million bid from Baugur, according to the Sunday Telegraph.

France: The CAC 40 index closed firmly higher. Peugeot (+2.99%) and Renault (+2.95%) took the front two seats of the index, with the sector in the speculative spotlight. Axa (AXA) (+1.92%) was another firm gainer, on news that Axa Asia Pacific is to buy Winterthur Life Hong Kong for between AUD278 million and AUD393 million, reinforcing the insurer's position in the region.

EADS (+1.28%) was in focus after Al-Bayan newspaper reported, citing Emirates' chairman, that the airline wants compensation for the A380 delays. Technip (+0.48%) won a contract from BP (BP) for the extension of a purified terephthalic acid plant located in Belgium. Germany's ThyssenKrupp launched legal action aimed at securing the acquisition of Canadian steelmaker Dofasco. Note that during Mittal's successful battle to acquire Arcelor (-0.25%), Mittal pledged to sell Dofasco to ThyssenKrupp.

Vinci's (+0.36%) GTM Construction unit won a €250 million contract for a sport and physical education center in Paris, as announced late on Friday. Vallourec (+1.23%) is to sell its steel ends pressing and forming unit Cerec to Eureka Metal.

Germany: The Xetra-Dax index (+1.67%) closed firmly higher on Wednesday, crossing the 6,600 level. ThyssenKrupp (+2.77%) was a top gainer on reports that it is taking court action against Mittal Steel in the NL, accusing it of breaching a letter of agreement over the sale of Canada's Dofasco. Infineon (IFX) (+1.05%) was in focus after the FT reported that the German firm is likely to hold on to Qimonda (QI). The unit said it could take years for its parent to reduce its stake in the group it floated in New York in August to below a majority.

Lufthansa (+0.97%) sold its stake in its Thomas Cook joint venture to partner Karstadt (+0.46%) for €800 million. The deal is expected to be closed in the first quarter of 2007. Karstadt, meanwhile, is reportedly looking for more acquisitions in the tourism industry.

Adidas (+0.83%) said it won't top Nike's (NKE) €50 million offer to sponsor Germany's national football team. Handelsblatt reported that CEO Ralph Dommermuth said that United Internet (+0.48%) is confident of reaching its target of winning 200,000 new DSL fast broadband customers in the fourth quarter. Douglas (+0.08%) is buying Buch & Kunst Gruppe from Barclays Private Equity for an undisclosed sum.

Alexander Wisch, Rocio Opazo-Aniotz, Claudia Perotti, Michael Sanderson, Emma Stevenson, Mariella Mongio, Pawan Girglani, Guarav Panchal, Julien Manrique, Isabell Witt, Sara Oscarsson, Ben Marino, John West

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