European Indexes Rise
From Standard & Poor's European MarketScope
European indexes closed higher Monday. Meanwhile, Wall Street gained on a Barron's report on Altria (MO). Oil slipped to US$55.19/bl.
UK: The FTSE 100 index closed in the black as mining and oil stocks were among the losers, while telecoms pared some losses. Sector-wise, life insurers - Friends Provident (+0.44%), Old Mutual (+0.44%), Resolution (+0.99%) - gained after Prudential (PUK) (-0.64%) sold Egg to Citigroup for £575 million. The UK life insurer's total group sales rose 16% to £2.47 billion.
In broker action: SABMiller (-1.10%) lost fizz after Goldman Sachs downgraded the company to neutral from buy. In company updates: oil explorer Cairn (-1.65%) said it was progressing in discussions, along with ONGC, with the government of India on a midstream solution, the resolution of which is anticipated in first half of 2007.
British Airways (BAB) (+2.75%) said that the cabin staff has called off its planned strike. HBOS (+0.35%) is selling a portion of the majority stake it secured in McCarthy & Stone just 5 months ago following a lengthy bid battle for the retirement homebuilder, The Daily Telegraph reported. Brewer and pub group Greene King (-0.74%) said trading for the 36 weeks to Jan. 7 has been in line.
France: The French market closed higher. Gains by Exane BNP Paribas (1.26%), amid takeover moves for Polish bank BPH SA, and Air Liquide (+1.92%) and Danone (DA) (+2.85%) more than offset weakness from two key players. France Telecom (FTE) (-0.89%) fell following Deutsche Telekom's profit warning, and Sanofi-Aventis (SNY)(-1.36%) sank on a report in La Lettre de L'Expansion that it could announce a friendly merger deal with US group Bristol-Myers Squibb (BMY) in the next few weeks.
Air Liquide outperformed on an ING note which argued that investment decisions taken in 2006 will bring yields from 2008. Danone (+2.85%) benefited from a JP Morgan target price increase. Saint Gobain (+0.69%) stirred up a flurry of broker target increases in anticipation of the sale of bottling arm Desjonqueres.
Veolia (VE) (+3.33%), ahead of fiscal 2006 sales tomorrow, was reported to be set to expand operations in China. Pernod Ricard (+0.7%) received an upgrade from WestLB, thanks to its strong volume growth and presence in key global growth markets. Belgian group GBL has taken a 5% stake in the beverage manufacturer. The weekend edition of the FT suggested that Carrefour (+1.07%) plans overseas expansion in Russia and Thailand.
Germany: The Xetra-Dax index (+0.53%) clocked up gains and closed higher as insurance and auto stocks pushed up the index. The leading faller was Deutsche Telekom (DT) (-4.02%) after it issued a second profit warning, having cautioned on earnings only six months ago. The telco giant cut €1.2 billion from its 2007 forecasts. The reduction in EBITDA comprises €0.8 billion from German wireline, €0.2 billion from German wireless and €0.2 billion from the action of the US$ exchange rate on the contribution from T-Mobile USA.
Elsewhere, Infineon (IFX) (+0.9%) posted quarterly sales of €2.13 billion and net profit of €120 million. The results came in at the top end of expectations. There was talk of Oracle (ORCL) being interested in SAP (SAP) (+0.95%), with €38.50 per share offered. Neither group commented on the matter, and competition issues would come to the fore.
Press reports cited the possibility of US construction firms wanting to buy a stake in Hochtief (+3.73%) should Australia's Macquarie Bank succeed in taking it over. Meanwhile, Hochtief said it was unaware of any takeover attempt. Wincor Nixdorf's (+1.36%) first quarter operating profit rose 18% to €46 million, with sales for the fiscal quarter ending December coming in at €549 million, up 13% year-over-year.
Elsewhere: The SMI (+0.77%) continued trading in the black right until the close, finishing as one of the top performing European indexes.
In Milan, both the S&P/MIB (+0.2%) and MIBTEL (+0.08%) closed flat on Monday, mirroring Wall Street's uneventful session.