European Indexes End Mostly Higher

Markets were comforted by solid employment data from the U.S. on Friday, while a political agreement in Germany boosted the euro

Major European equity indexes ended mostly higher Monday. Declines in U.S. stocks drew European equities off intraday highs. Business was thin with little newsflow and quiet trading in the U.S., where volumes were capped by the Columbus Day holiday. Global markets were comforted by solid employment data from the U.S. on Friday, while a political agreement in Germany boosted the euro Monday.

Germany's Xetra-Dax posted modest gains on news CDU's Angela Merkel will become German chancellor, three weeks after the inconclusive federal election. On the corporatate news front, DaimlerChrysler (DCX ) (-1.57%) is recalling some 256,000 vehicles to fix automatic transmission problems. VW's (-2.09%) supervisory board is meeting Monday, the first get-together under the new situation with major shareholder Porsche (+1.23%), which is likely to get two seats. Deutsche Boerse's (+0.87%) board confirmed Reto Francioni as new CEO. Munich Re (+0.9%) expects to make a €130 million profit in the fourth quarter from the sale of Karlsruhe Insurance.

Bayer (BAY ) (+0.1%) expects to launch its kidney cancer drug sorafenib into the U.S. market no later than January, 2006, against a consensus expectation of mid-2006, at the earliest. Unicredito has extended its takeover offer for HVB (+0.75%) by two weeks to Oct. 24. TUI (+0.46%) has extended its offer to buy CP Ships until Oct. 18 to receive necessary regulatory approvals. Douglas (+2.54%) saw its sales rise 5.7% in fiscal year ended September to €2.42 billion. Morphosys (+5.23%) has started three new antibody programs with Schering (SHR ) (-0.34%).

In the UK, the Financial Times-Stock Exchange 100 index held on to earlier gains, but only just, ending the session 12.2 points higher. The index received some support from oil and mining stocks, but weaker trading on Wall Street capped enthusiasm. Soaring copper prices boosted BHP Billiton (BHP ) (+1.82%), Xstrata (+2.58%), and Antofagasta (+3.01%). In the media sector, WPP (+2.16%) gained on news that French corporate raider Vincent Bollore has increased his stake in Aegis to 14.06%. Bollore is said to be targeting a stake of almost 20%. Reuters (RTRSY ) (+2.53%) jumped on a positive note from CSFB. Marconi (MRCIY ) (+9.65%) rallied on talk that Ericsson (ERICY ) is interested in buying the group. On the downside, PartyGaming (-12.19%) plunged after rival Empire says the market in the UK was flat in the third quarter. Scottish Power (-2.21%) says the overall trading outlook for the fiscal year remains in line with expectations, with the UK businesses performing strongly in the second quarter.

In France, the CAC40 index ended Monday's session a shade above unchanged as stocks retreated from morning highs. Breadth was 21-14 positive by the end of trading. Total (TOT ) (+0.19%) came off earlier highs as crude oil prices lost their footing. The sacking of Pierre Danon hit Cap Gemini's (-1.28%) share price. The COO was asked to leave the group following press and market speculation that he was vying for the post of CEO at Accor (+3.12%). Meanwhile, shares in the hotel group are on the up ahead of today's CEO nomination, although Danon could lose out to Gilles Pelisson, head of Bouygues Telecom.

Luxury stocks were given a boost by a report that higher oil prices are boosting spending on European luxury goods, with Hermes (+0.48%) and Christian Dior (+2.09%) among the gainers.

Italian insurer Generali has played down talk of a possible merger with AXA (AXA ) (+0.58%), saying that a deal would not be good for the market or for the consumer, and could also breach antitrust laws. Havas (-1.2%) chairman Vincent Bollore remains active in Aegis. The financier has upped his stake in Aegis to 14.06% from 13.35% and is believed to be preparing to increase his stake in Aegis to as much as 20%.

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