Europe Higher, Asia Mixed

European stock markets were higher on softer oil prices and strength on Wall Street

European stock markets were higher on Tuesday. In London, the Financial Times Stock Exchange climbed back over the 5000 mark, closing up 0.6% at 5000.5, as upbeat fiscal 2004 results from Schroders and BAT offset a profit warning from Boots. BAT announced a 20% rise in fiscal year pretax profits to 1.886 billion pounds, vs. 1.567 billion pounds and said its goal remains to grow earnings per share, on average, by high single figures and to pay out at least half of its earnings in dividends. Asset management group Schroders was the FTSE 100's top performer after announcing fiscal year pretax profits of 200.9 million pounds, vs. 75.3 million pounds on the back of increased revenues and significantly higher profits in asset management, good investment performance and good returns from private equity. GlaxoSmithKline received a boost from good results for France's Sanofi Aventis. High street chain Boots warned a slowdown in consumer spending is to hit profits.

Germany's Dax rose 0.7% to 4383.62, boosted by stock gains in the U.S. as oil prices fell and JP Morgan upgraded technology bellwether Intel and peer Texas Instruments. In Germany, performances got a further boost from corporate earnings announcements, especially those that were sweetened with good dividend payouts. Lufthansa resumded its dividend payment upon releasing fourth-quarter net profit of 236 million euro, beating analysts forecasts, against a 575 million euro loss in fourth-quarter 2003. The dividend will be 0.30 euro, vs. nil paid in fiscal 2003. Linde was another key gainer as brokers considered the group's key metrics as good, following yesterday's results. Schering ended higher along with other European pharmas following Tysabri's halt in the US yesterday. The Geneva Auto Show gave a boost to carmakers: VW's new Passat will not have cash incentives as the car manufacturer tries to reverse quarterly declines. Frankfurt overlooked news that German unemployment rose by 161,000 in February, vs. expectations of around 80,000.

In France, the CAC40 climbed 0.7% to 4054.98 as Wall Street made firm progress early in the session. US equities were lifted by upgrades on Intel and Johnson & Johnson and by softer oil prices. The ISM's index of national manufacturing activity slipped to 55.3 in February from 56.4 in January, falling short of forecasts, which had been predicting a rise to 57.0. The positive effects of Sanofi-Aventis's consensus-beating results were felt across the pharma sector, which is also bouncing back after being trounced by the news yesterday that MS drug Tysabri had been suspended by Biogen and Elan.

Asian markets were mixed on Tuesday. In Japan, the Nikkei 225 gained 39.93 points, or 0.34%, to close at 11,780.53, pushing the Nikkei to a fresh eight-month high. Water heater maker Noritz Corp jumped 3.6% to 1,834 yen after CSFB upgraded the stock to outperform. Marubeni Corp rose on news that a group led by the company gained the upper hand in Industrial Revitalization Corp on the bidding for sponsorship of supermarket chain Daiei Inc. Local steel makers climbed on strong industrial output data. Nippon Steel, JFE Holdings and Sumitomo Metal went up 1.0%, 1.9% and 2.2%, respectively. On the downside, Tanabe Seiyaku slid 3.5% to 1,182 yen after two rivals suspended sales of a multiple sclerosis drug similar to one Tanabe is working on. The broader TOPIX gained 2.5 points to 1,179.

Hong Kong's Hang Seng Index dropped 134.20 points, or 0.95%, to close at 14,061.15, with index heavyweight HSBC Holding sliding after the bank's 2004 results fell at the low end of market forecasts. As a result, JP Morgan downgraded HSBC to "neutral" from "overweight".

Canada's benchmark TSX/S&P gained 59.71 points, or 0.62%, to close at 9,728.03.

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