European Indexes Gain
From Standard & Poor's European MarketScope
European indexes gained Friday morning. Heavyweight petrochemicals benefited from OPEC's move to cut output by 1.2 million barrels per day, causing oil prices to firm around US$59 a barrel. Futures pointed to a higher open across the Atlantic on strong earnings.
UK: The FTSE 100 index held on to its gains at mid-session, helped by miners and oil stocks. Britain third-quarter GDP data were stronger than expected, firming expectations of a rate hike by the Bank of England.
In London, focus was on M&A. Steelmaker Corus (CGA)(-1.57%) agreed to be taken over by India's Tata Steel in a deal valuing the Anglo-Dutch steelmaker at £4.3 billion pounds, which will create the world's fifth-largest steelmaker. Hammerson (+2.54%) rose on hopes of sector consolidation.
In other news, Unilever (UN) (+0.23%) recalled Knorr-Lipton products on allergy alerts. Shire's (+0.05%) Elaprase got the backing of Committee for Medicinal Products for Human Use of the European Medicines Agency.
PartyGaming (-1.60%) said third quarter revenue rose 53%, but said that since quitting the U.S. on Oct. 13, average daily gross revenue of the non-U.S. facing business has been 2% below that seen in third quarter. In broker news, Pearson (PSO) (+1.61%) was pushed higher by a target hike at Goldman.
France: The CAC 40 index (+0.53%) traded higher. Accor (-0.28%) underperformed as it posted nine months revenue of €5.641 billion, +7%, +6.3% like-for-like. In M&A news, Axa (AXA) (+1.31%) acquired Gerflor for about €310 million and plans to build up the company through acquisitions. France Telecom (FTE) (+0.27%) bought a majority stake in Neocles Corporate (unlisted computer services company) for €5.5 million.
LVMH (+0.18%) CEO Bernard Arnault and Albert Frere are considering a bid for Aston Martin, the FT said. It added that a bid for Aston Martin would be worth €1 billion. Elsewhere, Credit Agricole (+0.63%) plans to boost U.S. corporate and investment bank revenue by as much as 40% in the next two years, Les Echos wrote. EADS (-0.09%) has announced that it must sell 420 A380 aircraft to reach the break even point, a 55% jump from the previous estimate of 270 planes. So far, just 159 orders have been placed.
Euronext (+0.06%) said it will cut clearing fees by an average of 15% on its cash markets to increase transparency and become more competitive. On the broker front, Michelin (+1.22%) enjoyed a raised target by Morgan Stanley, the analyst highlighted the tangible steps to accelerate cost cutting efforts.
Germany: The Xetra-Dax index (+0.41%) remained comfortably higher at mid-session Friday. DCX's (DCX)(+0.14%) Chrysler unit has launched an initiative to cut US$1,000 in costs for each vehicle produced in an effort to return to profitability, wrote the WSJ. Of interest to Deutsche Boerse (+1.3%), Euronext said it will cut clearing fees by an average of 15% on its cash markets to increase transparency and become more competitive.
Deutsche Bank (DB) (-0.32%) is in talks to buy Tilney Investment Management for £350 million, reported the FT. RWE (+0.28%) is being investigating by Germany's regulator for the way it allows competitors access the natural gas grid. Bayer (BAY) (+0.5%) has received three bids for HC Starck, a specialty material business, wrote the FTD.
Karstadt (+2.74%) has confirmed its 2006 profit targets, refuting a report in Platow Brief on Thursday that it may issue another profit warning. A consortium led by U.S. media investor Haim Saban is starting a new attempt to sell ProsiebenSat1 (+0.58%), according to the FTD. Key on the broker front, Goldman Sachs downgraded both Munich Re (-0.23%) and Hanover Re (-1.72%) to neutral from buy.
Elsewhere: Spanish shares continued their positive performance at midday amid strong banks.
The Nordic bourses lost some gains from early morning trade, but continued above the gain line.