The FTSE 100 closed in the red as food producers weighed after TATE & LYLE (-27.80%) dished out a sour first half trading update. The sugar & sweetener maker said its sugars business will post a small loss and is cautious about the outlook. UNILEVER (-2.95%), AB FOODS (-0.31%) fell. There was a rumor of an emergency BoE rate cut, which traders said was 'total rubbish'. Also, Alan Greenspan and Freddie Mac CEO Richard Syron voiced concerns of a US recession. Wall Street was lower due to skyrocketing oil prices and profit-taking. Oil fired up over US$83/bbl helping energy majors. Mining stocks ANTOFAGASTA (-3.54%), VEDANTA (-1.31%), KAZAKHMYS (-3.44%), fell on UBS downgrades. RIO TINTO (+1.80%) shareholders approve Alcan buy. LONMIN (+7.39%) gained as platinum price gained. In company news, NORTHERN ROCK (-7.39%) has borrowed a further £5 billion from the BoE, bringing its indebtedness to the bank close to £8 billion, the FT wrote. Among other fallers, COMPASS (-2.82%) fell on a Panmure cut to sell. ENTERPRISE INNS (-1.17%) lost fizz after delaying refinancing, with REIT talks put on hold. In other news, Pearl said it has made no decision on an offer for RESOLUTION (-0.29%). ASTRAZENECA (+1.20%) appointed Simon Lowth as CFO. SMG (-6.29%) has received significant interest in Virgin Radio.
The CAC 40 (-0.31%) closed lower, with the US in similar territory. A flurry of macro data failed to establish a clear rate narrative and former Fed Chair Alan 'Cassandra' Greenspan warned a US recession has become more likely. Of local note, McKinsey and HSBC, hired by the French state to advise the government on a possible nuclear industry restructuring, have recommended against pursuing a merger between ALSTOM (-4.09%) and AREVA (-2.83%), Les Echos reported. UK's Tate & Lyle profit warning hit DANONE (-1.43%). On the upside, ALCATEL-LUCENT (+4.35%) gained following market talk CEO Patricia Russo will leave the company. The FT reported this morning that Russo has been given a month to present an emergency restructuring plan to her board and lay out where research and sales efforts should focus. BNP (+0.56%) CEO Baudouin Prot sought to reassure investors yesterday that its third quarter will not be hit hard by CIB. In broker news, Cheuvreux upgraded EADS (+2.33%) to outperform from underperform, hiking its target to €30 from €17 and lifting estimates by between 20% and 40% from 2007 to 2015. A shareholder pact for SUEZ's (+0.61%) Suez Environnement is nearly agreed, La Tribune reported, citing the draft document. France TELECOM (+0.69%) has sold Orange Netherlands for €1.33 billion to Deutsche Telekom.
Xetra-Dax closed the last session of the month and quarter on a slightly positive note, with Wall Street heading in the opposite direction after Freddie Mac's CEO said the US economy faces a 40-45% risk of recession. German macroeconomic numbers this morning revealed a surprise 1.4% m/m decline in retail sales in August. On the local corporate news front, Guy Wyser-Pratte has bought a 1% stake in TUI (+4.2%), according to Handelsblatt. The US activist investor reportedly said CEO Michael Frenzel should be ousted. LUFTHANSA (-0.88%) said it it won't exercise its right to buy Thomas Cook's 75.1% stake in Condor, clearing the way for AIR BERLIN (+3.37%) to do so. Merrill Lynch upped its voting stake in MUNICH RE (+1.66%) to 5.1%. DEUTSCHE TELEKOM (+0.36%) is buying Orange Netherlands for €1.33 billion from France Telecom. ALLIANZ's (+0.22%) Dresdner Bank is acquiring Italian broker RasBank, according to Dow Jones Newswires. Earnings-wise, IKB (+0.65%) said it will post a net loss of up to €700 million for its 2007/08 financial year. UK's Tate & Lyle viewing its near-term outlook with caution weighed on sugar peer SUEDZUCKER (-2.08%). Key on the broker front, Deutsche downgraded MERCK (-6.00%) to hold, UBS upgraded WINCOR NIXDORF (+2.24%) to buy and a number of brokers took a red pen to their targets on BMW (-1.63%) after yesterday's strategy update.
Oslo finished higher as NORSK HYDRO (+1.41%) and STATOIL (+0.96%) were well bid ahead of the merger of Hydro's Oil & Gas business with Statoil on Monday. WTI edged up to US$83.39/bbl. Stockholm also ended positive, while Copenhagen and Helsinki finished lower, as Wall Street traded in the red hit by soaring oil prices and profit taking. In Europe, German retail sales for August dropped by 1.4% m/m vs consensus forecast of an increase of +0.4%. Of local note, CARNEGIE (+11.07%) finished the top percentage gainer in Stockholm as the financial watchdog FI settled with SEK50 million fine following the trading scandal. Traders and analysts expected a harder punishment, with some even expecting the broker's license to be withdrawn. Also in financials, one local broker argued INVESTOR (+0.61%) is more likely to acquire the Swedish government's stake in NORDEA (+1.26%) and sees this as a potential first step in a deal between Nordea and SEB (-0.96%). Elsewhere, according to the FT, Norway's shipping companies are threatening to reflag their ships after the country's finance ministry proposed collecting NOK21 billion (US$3.8 billion) in deferred taxes from as far back as 1996. In broker action, JP Morgan initiated coverage of MTG (+1.71%) with an overweight rating.
The Ibex 35 (-0.03%) ended Friday's session flat, with breadth an evenly spread 1-1. In the US, Wall Street shifted down a gear as higher borrowing costs weighed on financial constituents. At home, Spanish EU-harmonised inflation jumped to a nine-month high of 2.7% in September, vs 2.2% in August. Of local note, safe haven TELEFONICA (+0.36%) was among the gainers. The Spanish government opposes the sale of SANTANDER's (-0.37%) 30% stake in CEPSA (+0.79%) to Sonatrach, according to Cinco Dias. Said Sonatrach has offered €5.5 billion for the holding. ABC wrote Espirito Santo would like to buy BANKINTER (-1.08%) but recognised that this is not possible at the moment as the Spanish bank is not up for sale. In other news, ACS (+0.97%) has reiterated its guidance that fiscal 2007 profit will rise 20% year-over-year to €1.5 billion. EBRO PULEVA (-3.62%) was soured by Tate & Lyle's profit warning. Spanish construction firms are considering entering the bidding for the privatization of the Pennsylvania Turnpike, according to La Gaceta. In broker moves, JP Morgan downgraded SOGECABLE (-0.47%) to neutral from overweight, and cut target prices on ANTENA 3 (-1.6%) and TELECINCO (-0.36%).