M&A and earnings were in focus Tuesday
From Standard & Poor's European MarketScope
European indexes were mixed Tuesday morning. Wall Street was set to open flat to higher ahead of the FOMC meeting.
UK: The FTSE 100 index continued to stay lower at mid-session with miners and oils stocks limiting any rise. Copper prices slipped, while crude fell a bit to US$54.41/barrel. In tobacco stocks, Imperial Tobacco (ITY) (-0.89%) said trading is in line and first quarter cigarette volumes have gone up. BAT (BTI) (-0.64%) is mulling a US$1 billion bid for Turkey's state-owned Tekel, according to The Times.
In the mining sector: Kazakhmys' (-1.24%) copper cathode production rose 5% in 2006. BHP Billiton (BHP) (unch.) may reportedly sell a stake in Richards Bay coal terminal in South Africa.
Problems returned for oil firms. BP's (BP) (-0.09%) joint venture in Russia has been found guilty of breaking the terms of its license to exploit one of the world's biggest natural gas fields, endangering its stake in the flagship project, The Independent reported. Royal Dutch Shell (RDS) (-0.35% ) could face US sanctions if its goes through with an Iran gas deal.
In other news, Corus (CGA) (+0.80%) was in focus as Tata Steel and CSN squared off against each other in a 10-hour battle starting at 4.30pm GMT to buy the steelmaker. Vodafone (VOD) (-1.01) has reportedly rejected a US$6 billion offer for its 3.3% stake in China Mobile.
Germany: The Xetra-Dax index (+0.1%) remained little changed at the midday stage. Hypo Real Estate (-1.87%) expects pretax profit to increase to at least €680 million this year, it said late on Monday after reporting that adjusted earnings before tax rose by a quarter in 2006 to €558 million (before accounting charges and restructuring expenses booked both last year and in 2005). For Munich Re (-0.93%), written premiums as of Jan. 1, 2007, are expected to be about €300 million, 3% lower year-over-year. The group said the effects of keener competition are likely to be evident at the other 2007 renewals.
According to Les Echos, DaimlerChrysler (-0.76%) is selling its aviation operations to German group ATON for an undisclosed sum. Richard Mayer has acquired a stake in TUI (-0.75%) for an amount of 'millions', the corporate activist told the FTD. In its fight against budget airlines, Lufthansa (+1.17%) said it wants to expand its flight offering out of Hamburg to include more flights to European holiday destinations.
Merck Serono (-1.05%) has launched easypod, its first electronic growth hormone injection device. Key on the broker front, Siemens (SI) (+3.99%) was well bid after a target hike at UBS. Deutsche downgraded Porsche (-1.36%) to hold from buy, having taken a red pen to its price objective on the stock.
France: The CAC 40 index (+0.33%) traded a touch higher at mid-session, with M&A and reporting action adding to the mix. Arcelor Mittal (-1.27%) weighed heaviest on the blue chip index amid talk of a takeover of Korean peer POSCO, a move denied by a member of Arcelor Mittal's management board, reported Reuters.
Vivendi (V) (+0.78%) boosted the CAC 40 1.5pts on a Deutsche Bank target price increase. In results news, Veolia Environnement's (VE) (unch.) fiscal 2006 consolidated revenue rose 11.9% to €28.620 billion and the group confirmed its 2006 targets.
Renault (unch.)-Nissan combined sales fell 3.6% in 2006 on a lack of new models. Gameloft (+0.78%) posted fourth quarter sales of €21.8 million, +41% year-over-year, on fiscal 2006 sales of €68.4 million. EADS (+0.68%) may cut as many as 8,000 jobs at Airbus sites in Germany as part of a reorganization, FT Deutschland said, citing the Hamburg works council.
Thales (-0.03%) is to sign a final accord today to buy 25% of DCN, wrote Les Echos. Air France (AKH) (+5.72%) said it is not bidding for a stake in Alitalia. Technip (+0.45%) won a US$610 million Abu Dhabi contract to build natural-gas facilities. UBS and HSBC have placed 10% of Scor (-0.48%), Les Echos said.