European Indexes Finish with Gains

Markets Friday continued the advance sparked by Wall Street's rally in the previous session

London: The FTSE 100 ended higher Friday as Wall Street accelerated, receiving a boost from GE's (GE) results after a slow start owing to lower-than-expected retail sales data - which fell by 0.9% in June, and by 0.4% ex-autos. Further support came from better-than-expected consumer sentiment data. Back in Europe, the Dutch Supreme Court ruled in favor of ABN Amro (ABN) and unfroze the sale of LaSalle to Bank of America. This helps the chances of Barclays (BCS) (+0.84%) over the Royal Bank of Scotland (+0.87%) consortium of buying the Dutch bank.

In other news, US aluminium giant Alcoa (AA) withdrew its US$29 billion takeover offer for Alcan (AL) following Rio Tinto's (RTP) (-2.1%) US$38.1 billion bid for the Canadian company. Investors took profits in the sector after yesterday's gains on the M&A activity, with Antofagasta (-0.35%), BHP (BHP) (-1.74%), and Lonmin (-1.66%) lower.

In broker action, Kingfisher (-0.56%) fell after JP Morgan cut its target, while Aegis (+4.04%) jumped after UBS argued that now was an excellent time to buy the shares.

In company updates, Electrocomponents (-1.87%) said first quarter sales are up 7% and was confident of progress. C&C Group (-16.34%) lost its fizz after lowering fiscal operating profit target, blaming poor June weather and continued heavy price-led competition.

Paris: The CAC 40 (+0.24%) closed Friday's session higher while Wall Street trades mixed following yesterday's record close. At home, L'Oreal (-4.15%) failed to top estimates, posting in-line first half sales of €8.514 billion, up 9.4% year-over-year. Market sources heard that Danone (DA) (-3.36%) has been calling analysts to guide them lower on first half because of problems surrounding Wahaha. Infosys (INFY) CEO S. Gopalakrishnanhas said that speculation the Indian software company is 'in discussion with certain large European companies' is without foundation. Cap Gemini (-1.67%) fell.

Among financials, renewed market talk had it that AXA (AXA) (+1.87%) is interested in Germany's MLP, reported Reuters. SocGen (+0.46%) acquired the fund administration services of Pioneer Investments in Germany.

In gas news, Total's TOT (+1.07%) CEO Christophe de Margerie signed an agreement with Russia's Gazprom today confirming it as development partner in the Shtokman LNG project.

In broker action, Citigroup upgraded Schneider (+1.51%) to buy from neutral and raised target to €120 from €100 following recent weakness. The French government is pressing harder for reform of the EADS (+0.04%) shareholder pact, with a government source quoted in the FT as saying yesterday that it would be "good for EADS to broaden its shareholder pact to new partners, preferably industrialists".

Frankfurt: Xetra-Dax (+0.49%) finished higher on Friday as it crossed a seven-year high. Wall Street traded mixed after investors digested macro data. BASF (BF) (+1.79%) closed as leading riser after a target lift from UBS. In local news, Handelsblatt reported that Deutsche Telekom (DT) (unch) failed in its search for a strategic partner for its T-Systems unit.

Arcandor (-0.86%) has sent documents regarding the sale of its Neckermann unit to interested parties, according to Reuters. Earlier in the week, there were reports that the company will list its Neckermann mail-order in first quarter 2008 and will sell off Karstadt department stores, which have an operating margin below 6-8%.

In auto news, DaimlerChrysler (DCX) (-0.85%) finished lower after car sales in Europe fell 0.2% to 8.5 million units in the 2007 first half as higher sales in eastern Europe balanced weaker demand in western Europe, according to German car industry association VDA.

Premiere (+0.26%) wants to raise prices if it takes over the TV rights for the Bundesliga, according to Sueddeutsche Zeitung. Demag Cranes (-23.28%) plunged as it cut its guidance, both top and bottom line.

In broker changes, Goldman upgraded Medigene (+2.76%) to neutral from sell, and added GPC Biotech (+5.75%) to the conviction buy list. Also, Cheuvreux added RWE (+0.86%) to its utilities top pick list.

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