From Standard & Poor's European MarketScope
The main European indexes marked inor gains Tuesday morning. Wall Street was expected to open flat. Oil hovered around US$59/barrel as cold weather in the US was expected to draw down distillate stocks.
UK: The FTSE 100 index gained a bit at mid-session with banks and retailers continuing to support. Sectorwise, financials were strong on hopes that the Bank of England will hold interest rates at 5.25%. However, the pound climbed against the US$ after a strong UK retail sales survey.
Retailers gained as UBS increased its price target on Tesco (+2.25%) and Morrision (+2.97%), saying significant property assets should not be ignored. Defense stocks took off on US Defense Budget, with the USAF expected to ask for US$20 billion.
The high oil price failed to fire up energy stocks after BP (BP) (-2.12%) drilled out disappointing quarterly figures. BP posted a 12% fall in fourth quarter replacement cost profit hit by falling production and higher costs, taxes. The oil giant also lowered its output growth target for 2009.
Insurer Aviva (+0.72%) posted an 18% jump in worldwide life and pensions sales to £26.213 billion and said it is confident of further growth in 2007. Pubs group Regent Inns (+1.98%) said EBITDA before exceptionals slipped to £12.3 million. From the press: Cinven and Texas Pacific Group have teamed up to plan a rival bid for Sainsbury (+0.93%), The Times reported.
Germany: The Xetra-Dax index (+0.29%) remained higher at mid-session Tuesday. Infineon (IFX) (-0.91%) underperformed on disappointing news from U.S. group National Semiconductor (NSM). MAN (+0.66%) reported a 57% rise in fourth quarter operating profit to €354 million, ahead of expectations. Operating earnings for the year as a whole came in at €1.105 billion, with net profit at €472 million.
Deutsche Telekom (DT) (+0.44%) was also in focus amid market talk that it is eyeing the UK's Cable & Wireless. Also, its T-Systems unit may win an IT services contract in the UK worth over €1 billion, according to Handelsblatt. DaimlerChrysler (DCX) (+0.31%) is looking to integrate its Mercedes and Chrysler units, according to the WSJ.
More earnings news, IWKA (-2.75%) tabled 2006 EBIT of €33.7 million after a loss of €42.9 million in 2005. Symrise's (+0.81%) 2006 sales rose 7% to €1.23 billion and EBITDA came in at €243 million against €193 million last time. Air Berlin (+1.22%) saw its January passenger count rise 8.7%, with the load factor at 64.9%, up 1.9 percentage points. Finally, Endesa's board meets Tuesday to discuss E.On's (EON) (+1.02%) takeover offer.
France: The CAC 40 index (+0.23%) picked up momentum paced by BNP Paribas (+0.63%), France Telecom (FTE) (+1.04%) and Carrefour (+1.01%). The former will start a unit in Israel focused on wealth management and export credits, La Tribune reported. In other news, the bank is sponsoring the creation of a university chair in financial mathematics, the FT reported.
The French mobile phone market grew 7.5% to 51.7 million users in 2006, the French telecommunications regulator said. France Telecom's (FTE) Orange is the country's largest wireless company, followed by Vivendi's (V) (+0.54%) SFR and Bouygues's (-0.56%) Bouygues Telecom. JP Morgan upgraded Carrefour to neutral from underweight.
Elsewhere, EADS (+1.11%) may sell some of its German Airbus factories to cut costs, FT Deutschland reported. EDF (+0.73%) wants to operate new-generation nuclear reactors in the UK, Les Echos reported.
On the downside, Total (TOT) (-0.28%) fell after BP reported disappointing fourth quarter profit and cut its growth output target. STM (STM) (-0.55%) dipped following news National Semiconductor's sales warning. Among those reporting, Neuf Cegetel (+1.53%) delivered solid fourth quarter results. Lehman Brothers upgraded Atos (+2.31%) to overweight from equal weight and Deutsche Bank upgraded the company to buy from hold.
Elsewhere: Spanish shares gained ground at midday with the major banks and Iberdrola rising further.
Three of the four Nordic bourses traded higher at mid-session, while Helsinki was flat as a flood of weak reports put a dampener on sentiment.