Positive broker calls and M&A news gave stocks a lift
London: The FTSE 100 closed higher Monday, supported by the mining sector and positive broker recommendations. Wall Street was in positive territory, with Alcoa's quarterly figures expected after the closing bell. WTI was at US$72.31/bbl, tracking events in Nigeria.
Among commodities, copper and lead touched highs. JP Morgan raised targets on a number of mining stocks arguing that diversified miners should continue to generate strongly positive earnings throughout the downturn.
Among the top gainers, Tate & Lyle (+4.69%) was in demand after Credit Suisse upgraded the stock, saying the shares seem to have the best of all worlds. Rexam (+1.56%) was marked higher after Citigroup raised the support services firm to buy. Real Estate stocks retreated after Bovis Homes (-10.86%) released a cautious trading statement, adding it has generated good pretax profit growth in line with internal expectations.
In other news, a number of brokers were concerned over a slowdown in market share gains at Marks & Spencer (+0.72%) due to rising interest rates, strong comparatives and poor weather. M&S released its trading statement tomorrow.
In company updates, ILFC picked Rolls-Royce's (+2.54%) Trent 1000 engines to power 40 Dreamliners in a contract worth US$1.3 billion. Premier Foods (-4.68%) said it was confident of meeting fiscal targets.
Paris: The CAC 40 (+0.03%) closed the session flat while Wall Street trades slightly higher. Locally, Danone (DA) (-3.28%) offered €55 per Numico share, valuing the Dutch group at €12.3 billion. Numico said its board unanimously supported Danone's offer. This official news was released at the European close.
Elsewhere, Deutsche Bank upgraded Arcelor Mittal (MIT) (+2.75%) to outperform and lifted its target to €50 from €45. EDF (-2.08%) fell on a rumor that it would make a bid for RWE, a move seen as very unlikely by market sources. EDF could buy Suez's (-1.14%) gas operator Distrigaz, Les Echos reported.
Air France-KLM (+2.00%) could bid for Alitalia, La Stampa said. The stock recovered somewhat from recent underperformance.
Exane upgraded France Telecom (FTE) (+1.32%) to neutral from underperform. AXA (AXA) (+0.99%) expects to generate as much as €10 billion in premium income this year. A week ahead of the meeting between French president Nicolas Sarkozy and German chancellor Angela Merkel, it seems ever more likely that EADS (+0.58%) will have a sole CEO - thought to be Thomas Enders, Les Echos reported. However, a German government spokesman has told Reuters he knows of no Franco-German deal.
The president of Alstom's (+0.54%) transport unit said that the transport division results will be 'excellent'.
Frankurt: The Xetra-Dax (+0.36%) closed in positive territory as US equities traded higher. In Frankfurt, M&A talk did the rounds: Traders said there are unsubstantiated rumors of Dexia possibly bidding €20.10 per share for DEPFA (+7.11%). Traders also noted unsubstantiated rumors of a €18.5/share bid from Hynix Semiconductor on Infineon (+0.54%).
BASF (BF) (+0.53%) said it is not interested in taking over a rival as chemicals firms are too expensive at present, according to Dutch paper Financieele Dagblad, which cites a board member.
In carrier news, Air Berlin (+4.23%) ordered 25 Boeing 787 Dreamliners for long-haul routes, with list price of US$4 billion to be delivered between 2013-2017. Meanwhile, Les Echos reported that Thomas Enders could become EADS's (+0.58%) sole CEO.
In the pharma sector, Bayer's (BAY) (-1.32%) experimental pill rivaroxaban is reportedly more effective than standard injections of Lovenox for the prevention of blood clots after knee surgery. VW (+0.31%) says it wants to build a new US factory if the dollar stays week, according to Focus.
Key on the broker front, Goldman Sachs upgraded ThyssenKrupp (+1.61%) to buy from neutral, and Lehman Brothers downgraded Metro (-0.66%) to underweight from equalweight.