A roundup of Wednesday's action on major European exchanges
The FTSE 100 closed lower as Wall Street traded in the red on weak durable goods data. New homes sales rose more than expected. At home, SAINSBURY (+6.39%) jumped after posting 4Q LFL sales ahead of estimates. The supermarket group also announced a GBP1.20bn j/v property partnership with BRITISH LAND (+1.66%). XSTRATA (-5.22%) sank after Brazil's Vale announced merger talks had ended. KAZAKHMYZ (+4.15%) gained after confirming it was in talks with the Kazakh govt on a variety of options, including the potential to acquire natural resource assets in Kazakhstan in exchange for the government acquiring a minority stake. BP (+0.10%) was in focus on news it has been forced to suspend 148 employees seconded to TNK-BP, after a visa dispute. JC Flowers is reportedly working on a fresh approach to FRIENDS PROVIDENT (-1.21%). UNITED UTILITIES (-1.58%) said it is on track to deliver in-line results. SSE (-1.80%) announced a GBP6.5bn investment in renewable energy and said it expects to report FY figures in line with consensus. TOPPS TILES (-6.52%) warned the consumer market is challenging and there is no change in sight, as it forecast a 0.5% fall in group LFL in 1H. DEBENHAMS (-17.13%) plunged on a 47m share placement by ML.
The CAC 40 (-0.33%) closed the session in the red, while Wall Street trades lower. Oppenheimer sees further losses for Citi while a drop in durable goods orders fans fears of recession. Of local note, the banking sector weighed: BNP PARIBAS (-1.01%), SOCGEN (-1.12%), CREDIT AGRICOLE (-3.21%), DEXIA (-2.45%). AIR FRANCE-KLM (+2.54%) rose. It will present a new offer for Alitalia on 28 March, according to Italian unions. CEO Jean-Cyril Spinetta has reportedly proposed to take on 180 Alitalia pilots between 2008 and 2010. Separately, Air France-KLM may have to raise its fuel surcharge again to take into account rising oil prices, Les Echos reported. ARCELOR MITTAL (+2.10%) plans to close its Lachine wire mill in Montreal, Canada, in June resulting in the loss of 100 jobs. PERNOD RICARD (+0.91%), is expected to be one of four bidders for Vin & Spirit, the Swedish state-controlled drinks group behind Absolut vodka, by tomorrow's deadline for binding offers, The Times wrote. ILIAD's (+0.83%) Free and NEUF CEGETEL (-0.55%) want the prices of FRANCE TELECOM (+1.10%) lines to be lowered, Le Figaro reported, citing Xavier Niel, the head of Free. Separately, UBS added France Telecom to its European Top 20 list.
Unable to break even, Xetra-Dax (-0.54%) finished the day with minor losses as Wall Street also continued to lose ground due to disappointing durable goods orders and general fears about the state of the US economy. At home, DEUTSCHE BANK (-1.97%) warned investors that the current market climate is making reaching its profit goals tough. Also in the financial sector, reports in German publication Manager Magazin suggested that ALLIANZ (-0.71%) may sell the investment and corporate client arm of its Dresdner Bank unit to Chinese investors. Moreover, Allianz announced that it would enter the Japanese life insurance market. Manager Magazin also reported that FREENET (+2.05%) might purchase smaller competitor Debitel, currently held by private equity firm Permira for c.EUR1.5bn. Sticking with private equity, ESCADA (+32.37%) skyrockted as Handelsblatt reported that Apax Partners might be willing to take a stake. Also on the M&A front, BAYER (-0.99%) said its US unit Medrad had successfully completed its offer for Possis Medical, now holding 92% of all outstanding shares. In other news, utility giant RWE (-0.26%) announced that it would invest EUR 250m in wind energy projects in Poland. Finally, German cartel authorities allowed 44 book shops operated by Germany's largest book seller Hugendubel/Weltbild to be launched in ARCANDOR's (+2.52%) Karstadt stores.
The Ibex 35 (-0.23%) ended Wednesday's session mildly lower as Wall Street trades in the red pulled down by an unexpected slide in durable goods orders. Back in Spain, IBERDROLA (-0.86%) denied offering a 20% stake to France's EDF, according to Expansion. Meanwhile, El Economista wrote that Iberdrola has appealed to the Industry Ministry to overturn a decision by Spain's energy watchdog, CNE, not to limit the voting rights of shareholder ACS (+2.21%) and prevent the group from increasing its stake above 10%. ACS also said that it is not planning to take over Germany's Hochtief as it respects its independence. Algerian company Sonatrach aims to acquire SANTANDER's (+0.16%) 30% stake in CEPSA (+0.07%), according to la Gaceta de los Negocios. In corporate news, MARTINSA FADESA (+3.49%) expects to reach a final agreement in the next days. ARCELOR MITTAL (+1.37%) plans to close its Lachine wire mill in Montreal, Canada, in June with the loss of 100 jobs. Separately, Arcelor today confirmed that the Court appointed divestiture trustee has entered into an agreement to sell the group's Sparrows Point steel mill to OAO Severstal for US$810m, net of debt. On the broker front, Citigroup cut REALIA's (-1.69%) target to EUR 4.60 and kept sell. Goldman removed ZELTIA (+2.82%) from its conviction buy list.
Nordic bourses closed flat-to-higher while Wall Street trades lower as weak durable goods data offset unexpectedly high February new home sales. In earnings locally, DANISCO (+1.76%) rose as it raised its FY07/08 group EBIT guidance to above DKK2bn vs DKK1.95bn previously and upgraded EBIT forecast for Sugar by DKK100m to c.DKK600m. Within the steel sector, RAUTARUUKKI (+5.56%) outperformed on news it aims to close one of its Finnish plants by 2011 and to switch to a more environment friendly raw material at its Raahe mill, consequently reducing carbon dioxide emissions by 10% and energy consumption by 8% annually. On the downside, VOLVO (-2.53%) suffered as CEO Leif Johansson told DI that the truckmaker's NA sales are declining and that he fears the downturn in the US economy will spread around the globe with negative effect on Volvo's markets elsewhere. In broker focus, Morgan Stanley trimed TP for ASTRAZENECA (-3.45%) as it remains cautious on major EU pharma names. Merrill Lynch added WILLIAM DEMANT (-0.27%) and NOVO NORDISK (-1.68%) to healthcare least preferred list.