European Indexes End Higher
From Standard & Poor's European MarketScope
European stocks finished mixed, mimicking a lackluster open on Wall Street. M&A talks drove gains in London while oil stocks were under pressure as the price of crude slipped to $59 per barrel.
United Kingdom:The FTSE 100 index ended the day with solid gains as M&A news spurred stocks higher. In London, Scottish Power (+3.3%) jumped on bid hopes. Germany's E.On is expected to launch a bid, despite disagreement over a price. Scottish & Southern (+1.83%) is also said to be considering a rival offer. P&O (+3.11%) is expected to meet possible buyers this week in an attempt to generate a bidding auction, after it emerged that both Singapore's Temasek and Hutchinson Port of Hong Kong have appointed investment banks to advise them on potential bids. Australian bank Macquarie is said to be looking at the LSE (+1.32%) after appointing Goldman Sachs (GS ) as an adviser.
Man Financial (+0.57%) announced it has submitted a bid for Refco assets. Carillion (+3.62%) reversed an early slump. The stock was down this morning on weekend reports that it is preparing a takeover on troubled rival construction group Mowlem (+3.01%). Budget carriers easyJet (-1.4%) and Ryanair (-3.01%) fell despite positive numbers, after the Irish group issued a cautious outlook for the remainder of the fiscal year.
France:The CAC 40 (+0.11%) index closed little changed, trading with a positive breadth of 22-17. Total (TOT )(-0.83%) pared earlier losses but remained below breakeven despite reports it has found a sixth oil discovery in Libya's Block NC186. Sanofi (SNY )(+1.34%) finished stronger after Total's CFO said the oil giant plans to hold its 13% stake in the pharmaceutical group. Sanofi is expected to post strong third quarter sales tomorrow. Veolia (+1.0%) was positive after reporting a strong operating profit in nine months and confirming fiscal year guidance. The French government faces a dilemma as Spanish groups pitch their bids higher than those from France. APRR (unch.), Sanef (+1.49%), ASF (-0.79%) and bidder Vinci (+0.97%) remained on the watchlist. BNP-Paribas (+0.31%) provided some support after it confirmed that Philippe Blavier is leaving and will be replaced by Jacques d'Estais.
On the reporting front, Ciments Francais (+0.05%) posted nine months sales up 14.5%, driven by strong performances in the US and Turkey. PPR (-0.11%) remained in the red after its CEO Francois-Henri Pinault told the FT that he expects luxury sales to reach 7% in the US over the next five years as immigrants acquire more luxury items.
Germany:The Xetra-Dax index closed higher on Monday after a slow start. In Frankfurt, industry output in September rose a better-than-expected 1.2%. On the corporate news front, Munich Re (+0.8%) reported third quarter net income after minorities of €492 million, higher than expected, on near flat gross premiums of €9.2 million. The Allianz stake sale offset damage costs and the company said its goal of 12% RoE is within reach. Several top managers are expected to leave HVB (-1.9%) because of differences in strategy. Commerzbank (-1.66%) was marked lower after the placing of 1.9 million shares at €22.60 took place. Deutsche Boerse (+0.44%) and Euronext could discuss a merger as an alternative to bidding for the UK's London SE, reported The Independent on Sunday. Details of Metro's (+1.58%) IPO of its Praktiker do it yourself unit were taken well by the market.
Infineon (+0.99%) is reportedly considering splitting off its memory chip unit. SAP (+0.14%) has no plans to buy Switzerland's Temenos, the CEO told F&W. E.On (+0.52%) has begun talks to buy Scottish Power for £12 billion. Posting a nine months loss of €84 million, Aareal Bank (+8.97%) said the issuing of extraordinary bad debt provisions will come to a halt. United Internet (+5.74%) added 190,000 DSL subscribers in third quarter.
Elsewhere:Amsterdam AEX index ended Monday's session modestly higher, a shade over the 400 mark, thanks to the news on oil. Investors took profits in KPN (-1.22%) after the group posted roughly in-line third quarter figures and raised its fiscal year guidance. However, these were widely expected and therefore already priced in.
Spanish stocks ended Monday's session little changed as a strong performance from Altadis (+1.51%) helped offset weak oil stocks.
Prepared by Zaida Espana, Michael Sanderson, Mariella Mongio, Alexander Wisch, Holly Cook, Emma Stevenson, Pawan Girglani, and Rocio Opazo-Aniotz (Standard & Poor's); Alex Halperin (BusinessWeek Online)