European Indexes Close Mixed
From Standard & Poor's European MarketScope
Europe's major indexes closed mixed Thursday. Wall Street gained after a tame US CPI report eased inflation worries. Wednesday's FOMC minutes revealed that the Fed views the current core inflation rate as 'uncomfortably high'. Oil inched near US$59/bbl. EIA data Wednesday showed a draw in US fuel stocks.
UK: The FTSE 100 index closed higher. In London, India-focused company Vedanta (-6.42%) posted a 284% jump in first half EBITDA to US$1.3 billion, beating estimates, driven by better prices and strong volume growth. However, the miner's shares were hit on funding concerns about its plans to invest US$1.9 billion in India.
Top gainer National Grid (+6.01%) saw a 12% rise in first half pretax profit, and said it would return £1.9 billion. The energy network operator's shares also benefited from news of the demerger of its broadcast and cell phone mast businesses. Utility stocks - Kelda (+1.25%), United Utilities (UU) (+0.46%) and Centrica (+0.29%) gained.
Publishing group Reed Elsevier (-3.91%) reiterated its fiscal 2006 targets, but said that its Education unit would underperform. In other news, BT Group (BT) (+0.18%) said it has made a recommended cash offer for PlusNet for £67 million. Ladbrokes (-3.43%) said gross wins for the 10 months to Oct. 31 increased by 8%, but the stock fell on profit margin concerns.
Germany: The Xetra-Dax index (+0.19%) found positive direction. MAN (+3.63%) released a formal offer for Scania, confirming an offer price of SEK475 per share. Talk of Scania making a counter bid lifted the German truck maker's stock price. Remaining within the auto sector, Porsche (+4.66%) may sell €8 billion in new shares to finance possible acquisitions and boost its stake in VW (+1.48%). This increased speculation that it will completely take over VW.
DaimlerChrysler (DCX) (+1.92%)was marked higher as Wolfgang Bernhard, considered a restructuring expert, may return to his former employer from VW. HVB (-0.26%) reduced its stake in Munich Re (-1.25%) through an accelerated offering, from 4.9% to about 2.2%. The transaction reportedly had a market volume of about €782 million.
Infineon's (IFX) (-2.33%) fourth quarter earnings were weaker than expected, with quarterly EBIT at €30 million against an expected €64 million. The slide in the stock price was tempered by speculation that the group has won the platform for iPhone. Epcos's (+4.35%) fourth quarter EBIT topped expectations, coming in at €16.8 million. Sixt's (+3.56%) quarterly pretax profit came in at €34.9 million, up 21% year-over-year.
France: The CAC 40 index ended marginally lower, although breadth was 23-16 positive. In Paris, BNP Paribas (-2.03%) caused significant pain: third quarter net profit at the bank rose 25%, but there was a q/q slowdown. Vivendi (V) (+0.13%) reported third quarter net income of €1.561 billion, +141.6%. Technip (+3.33%) posted third quarter net profit of €60.3 million, +63.4%.
Earnings aside, Renault (+0.88%) will lay off 1,300 employees in Spain, Cinco Dias wrote, citing the chairman of Renault's Spanish unit. Peer Peugeot (+3.36%) jumped as analysts cheered the 6.7% volume growth in W. Europe in October, double the market rate as a whole. Also, the Porsche/VW deal triggered renewed interest in the sector.
Bouygues (+0.34%) may consider selling its phone division to fund the purchase of Areva should France's next government decide to sell the nuclear reactors maker. Challenge magazine reported that Pernod Ricard (+1.60%) could buy out Stolichnaya vodka (No. 2 worldwide) from the Russian state and valued at €2 billion.
Elsewhere: The Spanish Ibex 35 index closed in positive territory on Thursday. Repsol (REP) (-0.32%) remained the most significant underperformer, after delivering third quarter adjusted net profit -11.3% to €844 million, below consensus, amid lower refining margins. The oil group was also in focus on news that businessman Manuel Jove is in talks about taking a 2% stake and a seat on the board.
The SMI index (-0.02%) closed flat on Thursday.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.