From Standard & Poor's European MarketScope
The major European indexes finished lower Wednesday on a raft of disappointing economic data. Trading activity was subdued ahead of the ECB decision on euro-zone interest rates Thursday; the central bank is widely expected to raise rates by 0.25%. Wall Street traded around breakeven after mixed economic data. US third-quarter GDP showed the economy grew at a faster-than-expected pace in the third quarter. On the oil front, the news weekly crude inventories fell more than expected was tempered by a large increase in distillate stocks.
Germany: The Xetra-Dax index ended Wednesday's session a touch below breakeven. In Frankfurt, German retail figures came in at +1.9% m/m for October, much better than expected, helping boost shares of Metro (+2.2%), Karstadt (+1.29%), and Adidas (+1.36%). Elsewhere, ThyssenKrupp's (-0.35%) outlook on debt was cut by S&P to negative following the steelmaker's bid for Dofasco. Schering (SHR )(+0.68%) is not contemplating acquiring the pharmaceutical business of rival Altana (-0.49%).
Construction group Bilfinger (-0.34%) is looking for more acquisitions, and may finance them by taking on debt, Boersen-Zeitung reported, citing CEO Herbert Bodner. ProSiebenSAT1 (+0.73%) and rival broadcaster RTL plan to introduce charges for viewing their TV programs, FAZ wrote, and has talks under way with satellite operator SES Astra to encode their programs. On the broker front, Citigroup downgraded Infineon (-1.43%) to hold from buy, taking the price target to €8.70 from €10.
United Kingdom:The FTSE 100 (-1.23%) ended lower, as concerns over inflation, interest rates and high equity valuation dampened the mood. Daily Mail (+11%) was the biggest winner Wednesday, after beating forecasts and saying it is considering the possible sale of Northcliffe Newspapers. BP (BP )(-1.17%) and Royal Dutch Shell (RDS.A )(-1.33%) extended declines. Kingfisher (+2.16%) gained despite poor third quarter numbers as investors noted the sales fall at B&Q was smaller than expected. Sage (+0.98%) announced a 14% rise in fiscal year sales and said the start to 2006 has been encouraging.
Mitchells & Butlers (-4.17%) announced fiscal year figures better than forecast and said it will carry out a new £100 million share buyback. Steel group Corus (+6.7%) jumped on better-than-expected third quarter numbers, improving demand and selling prices in fourth quarter. Go-Ahead (+8.42%) gained momentum, after winning the Integrated Kent Franchise. Compass (-2.65%) dropped after a CSFB downgrade, Royal & Sun Alliance (-2.78%) suffered from a JP Morgan downgrade.
France: The CAC 40 index (-0.46%) ennded in the red with a 25-13 negative breadth. The market's consolidation came after days of consecutive gains. In Paris, Total (TOT )(-0.56%) declined as oil prices eased for a fourth consecutive day. France Telecom (FTE )(-0.61%) and Vivendi (V ) (-1.28%) were lower on a report in Le Parisien that mobile units Orange and SFR could face a €250 million fine each for market collusion.
AXA (AXA )(-1.50%) was also lower after the purchase of the Canadian subsidiary of CS Group's Winterthur for €226 million. Investors awaited to hear if Arcelor (-0.54%) would raise its bid for Dofasco to scupper ThyssenKrupp's friendly takeover.
Danone (+0.46%) (DA ) led the gainers, a day after takeover speculation led to a surge in the stock price. Defense plays were another bright spot: EADS (+0.87%) outperformed the market as the WSJ reported that China plans to place an order for 70 Airbus A320 planes.
Elsewhere: The AEX (-0.18%) ended lower on Wednesday, with a 15-8 negative breadth. TNT (-1.46%) and Ahold (-0.62%) (AHO ) dragged on the index as they saw some profit-taking after yesterday's 1.48% and 6.97% gains, respectively. The tech sector suffered, with ASML (-1.34%) pacing the declines.
Nordic markets also fell, with the exception of Copenhagen, which was supported by M&A action on index bellwether TDC (+4.42%).
Prepared by Zaida Espana, Valerie Vidal, Michael Sanderson, Mariella Mongio, Alexander Wisch, Holly Cook, Emma Stevenson, Pawan Girglani, Julien Manrique, and Rocio Opazo-Aniotz (Standard & Poor's); Alex Halperin (BusinessWeek Online)