Europe and Asia Lower

European stock markets were lower on Wednesday on a disappointing morning session on Wall Street. Asian markets were lower, despite a drop in the yen versus the dollar

European stock markets were lower on Wednesday on a disappointing morning session on Wall Street, prompted by profit warnings, sparked an early sell-off of U.S. stocks. In London, the Financial Times Stock Exchange 100 lost 5.10 points, or 0.10%, to close at 4990.40. The FTSE ended the session lower after briefly surpassing the 5000 points mark earlier today for the first time since 2002. U.S. stocks were lower at the time of the European close following a weak outlook statement from Cisco yesterday. At home, Shell kept a lid on proceedings however, trading ex-dividend. In the mining sector, Rio Tinto fell 1.7% on a broker downgrade. The media sector provided some relief, with ITV among the best performers after yesterday's favourable Ofcom decision and target price upgrades from brokers today. GlaxoSmithKline gained 1.57% ahead of tomorrow's fiscal 2004 results. Euronext finally revealed the details of its planned bid for LSE, signing a debt agreement with eight banks, and calculating that a merger with the LSE would create 203 million euro in annual pre-tax savings. Finally, Woolworths was boosted 2.08% after saying yesterday that it has rejected an indicative proposal from Apax Partners.

In Germany, the DAX lost 18.24 points, or 0.42%, to close at 4353.15. Frankfurt rallied, albeit briefly, to post a new two-year high, but drifted off to close lower. Slightly disappointing guidance from Schering and dwindling hopes for further consolidation within the German banking sector contributed to a subdued atmosphere today. Fundamentals (US dollar, lower oil) remain strong, however, and dealers expect the Dax to sustain upwards momentum. The pharma sector was in focus today, with Schering falling 2.6% after releasing fourth-quarter figures which were above expectations, but disappointing with a smaller dividend and profit outlook. Deutsche Bank fell 1.4% after being cut to hold at SocGen. DBoerse gained 1.2% after Euronext unveiled its strategy for incorporating the London Stock Exchange within its organisation. Lufthansa released January passenger traffic figures, which showed traffic rose 6.8% last month as travellers clocked up more air-miles.

France's CAC-40 lost 11.15 points, or 0.28%, to close at 3969.62. At home, CNP and Havas rallied after tabling better-than-expected fourth-quarter sales. Euronext surged 5.36% on major volumes in afternoon trading as the bidding war for LSE is seen hotting up after LSE this afternoon reported that January was its busiest ever month of trading. France Telecom rose 0.3% after majority-owned Mobistar said it will pay a gross dividend per share of 2.0 euro, as expected. FT is due to post results tomorrow. French autos outperformed, fuelled by Renault's strong fiscal year results yesterday. Other key results tomorrow include SocGen, Lagardere, and Clarins.

Asian markets were lower on Wednesday. In Japan, the Nikkei 225 lost 17.08 points, or 0.15%, to close at 11,473.35. The lower close occurred despite a drop in the yen versus the dollar. Yen weakness generally draws buyers to Japanese exporters, but the dollar's strength did little to inspire buying of exporters. Part of the reluctance to make a big commitment might have been the result of balanced portfolios ahead of February options settlements. Automakers including Toyota and Nissan made small advances in heavy volume. Decliners were led telecom and high-tech.

Hong Kong's Hang Seng was closed for Chinese New Year.

Canada's benchmark TSX/S&P was 9.95 points, or 0.11% higher, closing at 9,402.63.

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