From Standard & Poor's European MarketScope
Wall Street blue chips traded higher Friday, spurring gains in Europe. Crude oil prices continued to ease on forecasts of mild weather in the US for the first months of 2006. Meanwhile, futures and options expiry added volatility to the day's trading.
Germany:The Xetra-Dax index closed markedly higher as the Ifo business climate index rose to its highest level since August 2000, coming in at 99.6 for December against November's 97.8. On the corporate news front, SAP (SAP )(-0.31%) further stole a march on arch rival Oracle (ORCL ), which posted second quarter net profit down 2% year-over-year, citing lower-than-expected sales and acquisition costs.
DaimlerChrysler (DCX )(+0.66%) is considering cutting thousands of jobs in the coming years in addition to those already announced. Mining group RAG plans to push through by next week the purchase of 43% in Degussa (+3.3%) held by E.ON (EON )(+3.11%). RAG already has a 50% stake. Separately, BASF (+1.87%) said it may acquire Degussa's construction chemicals unit.
Arcelor is understood to be about to make a new offer for Dofasco, the Canadian steel maker ThyssenKrupp (-0.35%) is bidding for. Montagu is close to buying Beiersdorf's (+0.81%) BSN Medical unit, a joint venture with the UK's Smith & Nephew. The private equity firm is expected to pay about €1 billion. Premiere (-2.89%) took a knock on concerns about football TV rights, with D-day on 21 December. Axel Springer's (unch.) plan to take over ProSiebenSat.1 (-1.85%) may be vetoed by German regulators. United Internet (+1.40%) has topped 5 million customer contracts three years ahead of schedule.
United Kingdom:The FTSE 100 index ended higher, with 86-14 positive breadth. In London, Amvescap (+3.69%) led the advance, boosted by an upgrade to overweight from Morgan Stanley. The broker switched it preferred pick to Amvescap from Schroders (+0.58%). Housebuilder Persimmon (+2.98%) said it expects to report a strong fiscal year, in line with board estimates, with a 7% rise in turnover to £2.3 billion.
Centrica (+2.41%) said fiscal year earnings should come in line with consensus. IMI (-1.75%) said fiscal year organic growth will be around 4%. United Business Media (-0.75%) said second half performance was in line with expectations with PRN and CMP Asia achieving good growth. Vedanta (+4.55%) jumped on news of a US$2.10 billion aluminum smelter plant in India, boosting its total aluminum smelting capacity to 900,000 tpa.
The Lonson SE's (-0.32%) second largest shareholder Scottish Widows rejected the Macquarie offer, after a unanimous rejection from the group's board itself. The Times said the LSE's main shareholders Threadneedle Asset Management, refused to comment.
France:The CAC 40 index (+0.67%) closed above the 4,700 level, after recording an earlier fresh high of 4,724. Breadth was positive at 28-11. Total (TOT )(-0.51%) fell on energy prices. Suez (SZE )(+3.38%) was the main gainer after Morgan Stanley resumed coverage with an overweight stance and a €30 target.
Merger news provided focus. France Telecom (FTE )(-0.99%) fell after it said it would stick to its €15.80 offer for Telindus following Belgacom's €16.60 bid yesterday. Le Figaro broke news that Euronext (+2.51%) had received a bid approach from Deutsche Boerse. Arcelor (+0.97%) said it would decide whether to up its bid for Dofasco before the end of the year, denying earlier reports that a decision an improved bid was imminent.
Carrefour (+2.55%) was up on speculation about its shareholder structure after the breakup of the Halley/March shareholder pact. Iliad (+4.61%) jumped after a Cheuvreux target increase to €59 from €53, outperform. A delayed closing prepared the exit of TF1 (+0.51%) out of the CAC 40, leaving room for EdF (+2.08%), effective Monday.
Elsewhere: Nordic markets ended higher, except for Oslo, which was held under by negative trading in oil stocks and a sales warning from Tandberg (-35.89%). Crude oil futures approaching US$59.0 kept Statoil (-2.24%) and Norsk Hydro (-0.50%) lower. But elsewhere in the Nordics, an upbeat open on Wall Street boosted earlier gains further.
Helsinki's OMX was the top performer in the region, thanks to a strong performance from heavyweight Nokia (NOK )(+1.37%), added almost 42 points to the index. Finnish mobile phone sales rose 21% year-over-year in November. In Stockholm, Hennes & Mauritz (+1.14%) remained in the black as Cheuvreux added the fashion retailer to its sector top picks. The broker believes H&M is a good growth story and that the weaker performance in fourth quarter is a one-off due to warm weather issues.
The Ibex 35 followed other European market higher in afternoon trading. Oil prices kept Repsol (+0.04%) in check as banking stocks bounced.
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)