Europe Higher, Asia Mixed

European stock markets were higher on stronger U.S. retail sales and a rash of M&A activity on Wall Street. Hong Kong's index closed lower after a four-day rise

European stock markets were higher on Tuesday. In London, the Financial Times Stock Exchange 100 gained 17.10 points, or 0.34%, to close at 5058.90. The FTSE closed in positive territory as Wall Street opened a touch higher, ahead of Alan Greenspan's key testimony to Congress tomorrow. At home, BG's results provided some uplift after the group reported fourth-quarter net profit at 249 million pounds, ahead of forecasts while its one-year proved reserve replacement rate was 126%. Tobacco stocks were in focus as US group Reynolds American posted a fourth-quarter profit of $76 million. M&A news was again in the spotlight with news that SABMiller may make a bid for privately owned Russian regional brewer Krasny Vostok. Cadbury dropped on talk US drinks groups Coca-Cola and PepsiCo may be interested in a deal, the FT reported.

Germany's DAX gained 15.63 points, or 0.36%, to close at 4402.03. Stronger US retail sales and a rash of M&A activity on Wall Street provided the missing impetus for German stocks to push, and more importantly, finally close above the 4,400 level, its highest point since July 2002. The Dax briefly flirted with the level earlier in the day after the ZEW business confidence indicator came in higher than expected. US markets rallied after the retail sales numbers and Circuit City Stores received a $3.25 billion takeover offer. Big swingers, Warren Buffet and George Soros were active, investing in Comcast and Time Warner respectively. Earlier, German fourth-quarter 2004 GDP unexpectedly shrank by 0.2% quarter-over-quarter after a revised figure showed there was no growth in the previous quarter. Locally, HVB paced gainers on solid results from peer Commerzbank. Thyssen gained in delayed reaction to yesterday's solid first-quarter results. Commerzbank surprised everyone by releasing figures ahead of schedule, showing fourth-quarter profit slightly below target due to losses at its Polish subsidiary BRE.

In France, the CAC-40 gained 18.34, or 0.46%, to close at 4030.45. The CAC40 ended higher, as it was pulled to its feet by a solid early performance on Wall Street. U.S. economic data was in line with expectations, with traders still remaining non-committal ahead of tomorrow's key speech from Fed chairman Alan Greenspan to the US Congress. Supporting the CAC40 were France Telecom, Vivendi and Total. The latter rose ahead of the group's fourth-quarter results on Thursday. On the downside, Credit Agricole fell as a civil trial against Credit Lyonnais opened in Los Angeles today. Danone and Pernod made the press on bid speculation. Danone is viewed by some as a bid target for Cadbury, although others consider the theory as highly speculative.

Asian markets were mixed on Tuesday. In Japan, the Nikkei 225 gained 14.29 points, or 0.12%, to close at 11,646.49. Elpida Memory said it aims to double its market share for dynamic RAM chips and CSFB recommended investors buy technology shares. CSFB raised the industry's rating to Neutral from Underweight, recommending stocks like TDK and Fanuc. NTT was among the falling counters after NTT DoCoMo said it may take longer than expected for operating profit to return to growth. NTT dropped 0.9%.

Hong Kong shares fell 21.40 points, or 0.15%, to close at 13,995.83 on Tuesday after a four-day upside. Among 33 blue chips, 16 dropped while seven rose. Top HSI percentage laggard was Cosco Pacific, whereas the top gainer was CNOOC.

Canada's benchmark TSX/S&P lost 15.19 points, or 0.16%, to close at 9,570.03.