A roundup of Monday's action on major European exchanges
The FTSE 100 ended over 100 points lower Monday, with the banks and mining sectors weighing. Outperformers tended to come from the consumer staples sector, as investors moved into safe havens: IMPERIAL TOBACCO (+1.63%), UNILEVER (+0.34%). Wall Street was also in the red at the time of the London close, amid ongoing concerns over the US economic outlook. Former Fed Chairman Alan Greenspan told reporters on Sunday that the US economy was showing the first signs of stagflation. In London, data from Rightmove show house price inflation rose 4.8% in the month to 8 December, the lowest rise for almost two years. In corporate news, one of today's rare gainers was BAE SYSTEMS (+1.54%) on news of several contract wins. Luqman Arnold's Olivant is expected to increase the cash component of its bid for NORTHERN ROCK (-0.54%) by £200 million to £800 million, The Times writes. PROVIDENT FINANCIAL (-2.23%) expects to report strong profit growth for the year as a whole, in line with market expectations. Transport group ARRIVA (-1.84%) sees fiscal performance in line with management expectations. PHOTO-ME (-7.69%) reported a drop in first half profits but expects to be back in profit in second half. Other retailers, including WOOLWORTHS (-11.32%), DEBENHAMS (-7.08%) and NEXT (-4.47%) slumped on the back of downgrades at Seymour Pierce. HBOS (-3.51%) suffered target price cuts from Bear Stearns and HSBC. Merrill Lynch cut REXAM's (-6.37%) price target.
The CAC 40 (-1.61%) closed the session in negative territory with 7-1 negative breadth while Wall Street trades lower. Of local note, ALCATEL LUCENT (-5.15%) fell as UBS cut its target, highlighting that the mobile market remains challenging and uncertain and expecting it to see an 11% decline in fiscal 2007. UBS also cut AXA's (-2.22%) target to €36 from €40, seeing limited growth. AIR France-KLM (-3.57%) confirmed that it has made a non-binding offer to acquire 100% of the shares of Alitalia through an exchange offer and to immediately inject at least €750 million into Alitalia through a capital increase. WENDEL (-1.69%) plans to help SAINT GOBAIN (-2.62%) beat its financial targets, Journal des Finances reported, citing Wendel CEO Jean-Bernard Lafonta. CARREFOUR (-0.54%) has said it may buy more neighbourhood supermarkets in Brazil to expand into fast-growing urban areas. In fine fettle, PERNOD RICARD (+2.29%) is close to clinching the £1 billion purchase of the Stolichnaya vodka brand in a move that could pave the way for Pernod to challenge UK's Diageo as the world's leading alcoholic drinks group, according to The Mail on Sunday. EADS (+0.40%) is aiming for an equal division between civil and military revenue in 2020, CEO Louis Gallois has told Les Echos. VIVENDI's (-1.08%) SFR said plans to bid for NEUF CEGETEL (+0.64%), according to La Lettre de l'Expansion.
Xetra-Dax ended the session firmly in the red, with Wall Street trading in the red. RWE (+0.44) and Dt TELEKOM (+0.4%) were the only gainers in a down session. In the broader market, wind turbine maker NORDEX (-5.46%) was under pressure as it may not reach its fiscal 2007 EBIT target due to project delays. In M&A news, MUNICH RE (-0.96%) agreed to buy US healthcare insurer Sterling Life for US$352 million. COMMERZBANK's (-2.73%) property unit has made its first acquisition in Singapore, buying an office tower and development project for €324 million. The SEC has okayed DEUTSCHE BOERSE's (-2.23%) takeover of ISE, while the Frankfurt stock exchange operator's CEO, Reto Francioni, told Frankfurter Allgemeine Sonntagszeitung that further consolidation in Europe and the US is possible. ALLIANZ (-1.79%) intends to cut up to 500 staff at its investment banking arm Dresdner Kleinwort, according to Focus magazine. UNITED INTERNET (-2.94%) has no current plans to take over either FREENET (-0.95%) or VERSATEL (-4.84%), it said. Finally, ARCANDOR (-315%) has reached its third quarter earnings target, reported Euro am Sonntag.
The AEX (-1.53%) closed firmly in the red, with Wall Street also in gloomy territory. Former Fed Chair Alan Greenspan has warned the US economy is showing the first signs of stagflation. Back home, UNILEVER (+1.01%) was one of only a handful of blue chip stocks above the gain-line. Another, REED ELSEVIER (+1.13%), is to merge its back offices across its three operating divisions in a bid to achieve annual savings of £100 million a year, according to the Sunday Times. In broker news, Credit Suisse has resumed coverage of Reed with outperform. Financials ING (-2.29%) and FORTIS (-3.74%) weighed heavily. The former sees a target cut from UBS. ARCELOR MITTAL (-2.9%) said it has terminated an agreement to sell its Sparrows Point facility in Maryland, USA. KPN (-1.32%) announced plans to delist from NYSE, LSE and Frankfurt stock exchange. In the wider market, FUGRO (-2.64%) announced it has purchased Germany's HGN Hydrogeologie. No financial details have been disclosed. VOPAK (-1.16%) announced on Friday it has reached an agreement with its partners in the Pakterminal j/v to buy the remaining 50% of the shares it does not own. PHARMING (-20.0%) continued to fall after news on Friday that Rhucin has not been given EU backing. STORK (+0.21%) bucked the trend - it and the Candover-led consortium jointly formally announced the latter's €48.40/share, €1.5 billion bid.
Nordic equity markets ended the session lower amid a flow of bad news that boost selling. CARGOTEC (-7.96%) closed sharply down on news it will book a €18 million one-off cost in fourth quarter for a global inspection program. SAS (-6.32%) fell on Dagens Industri's report that the airline faces the threat of another strike and will, therefore, postpone the resolution of three of its business units to late January. CARLSBERG (-1.89%) declined on news that the UK's Takeover Panel has set the S&N bid deadline at noon of January 21. H&M (-1.81%) lost ground on disappointing November figures. ERICSSON (-5.6%) sank amid heavy selling prior to the stock's de-listing from Nasdaq 100 - the index will be re-shuffled on 24 December. But DANISCO (+3.93%) ended higher thanks to good first half07 EBIT before special items and Boersen's report that the time for a listing or divestment of the group's sugar division is near.