European Indexes Finish Higher

Markets got a boost Tuesday from strength in U.S. shares

London: The FTSE 100 closed strong as Wall Street traded higher. Datawise, US May pending home sales fell 3.5% and factory orders slipped 0.5%. At home, energy and miners were among the best performing sectors due to strong crude and metals prices. The BoE rate decision is due this week. £ traded at 2.0169, while WTI slipped to US$70.99/bbl on expectations inventory data will show a crude draw. Among commodities, copper and lead were strong. Gold took a break, easing a little. Further among miners, The Times noted talk of a knockout bid of £50/sh for Lonmin (+2.46%), adding that the acquisitive Xstrata (+1.37%) is said to be circling. Rio Tinto (+0.48%) is to proceed with a US$1.8 billion expansion of the Yarwun Alumina Refinery in Gladstone, Queensland. Pub companies' shares gained after Greene King (+8.75%) poured out a 17% rise in fiscal pretax profit, saying it plans to release funds by increasing balance sheet efficiency and unlocking extra value from property. Brewer Scottish & Newcastle (+0.08%) said UK operating profit will be lower in first half year-over-year due to the timing of last year's World Cup sales and poor weather. In other updates, Rolls-Royce (+2.15%) posted gains after its second quarter review impressed. Autonomy (+12.77%) is to buy Zantaz for US$375 million and raised £93.35 million after placing 12.7 million shares at £7.35/sh. Home Retail (+3.24%) benefitted from PE bid talk.

Paris: The CAC 40 (+0.71%) closed comfortably higher, with Wall Street trading in the black ahead of tomorrow's Independence Day break. Locally, financials gave strong support to the index: AXA (+2.09%) and BNP Paribas (+1.26%) added some 12 points. Revived market rumour surrounding the Halley family's stake pushed Carrefour (+3.09%). PPR (+2.94%) also strongly outperformed on read-across from UK's Kesa Electricals' confirmation it had received indications of interest to acquire BUT, its French furniture and electrical retailer subsidiary. PPR owns furniture chain Conforama. Danone (+1.25%) has confirmed a €5.3 billion offer from Kraft for its biscuits unit. Renault's (+2.69%) CEO Carlos Ghosn judges customer reaction to the new Twingo model to be 'very positive', reported La Tribune. Bouygues (+2.61%) and Areva (-1.2%) are mulling the possibility of setting up a j/v to build third generation atomic plants, Le Figaro wrote. Alstom (+2.24%) has won a €275 million contract to build a power plant in Ireland. EDF's (-1.09%) CEO Pierre Gadonneix reportedly said EDF would be interested in any gas assets sold by a merged GDF (+2.89%) and Suez (+1.55%). Elsewhere, UBS upgraded Business Objects (+2.31%) to buy from neutral and raised its target to €37.

Frankfurt: Xetra-Dax (+1.12%) finished comfortably above the 8,000 mark, with Wall Street trading higher ahead of the 4 July holiday tomorrow. Carmakers were in focus late in the session with the release of June US car sales data. VW (+2.99%) brand saw sales up 15% across the Atlantic, while DaimlerChrysler's (+0.28%) US sales decreased 2% in June. Elsewhere, SAP (-2.11%) responded to a lawsuit instigated by Oracle by admitting 'downloads that may have exceeded customers' rights of access'. Cash equities trading at Deutsche Boerse (+1.9%) was up 58% year-over-year in June at €273.7 billion. Derivatives trading rose 28%. Hedge fund Centaurus has built a voting stake of 5.1% in Heidelberger Druckmaschinen (+6.55%). BASF (+1.49%) is hanging on to its plastics division. It said small deals are being eyed and that it sees no signs of any imminent weakening of the strong demand that has kept plastics prices high. The head of Norddeutsche Affinerie (-1.25%) will meet the head of Austria's A-TEC Industries this week as the two groups battle it out for control over Belgium's Cumerio. Key on the broker front, MAN (+4.14%) was added to Goldman Sachs's conviction buy list, with the price target raised to €125 from €113. Deutsche lifted its price objective for Siemens (+3.03%) to €120 from €110, reiterating buy. Singulus (-3.32%) was under pressure after a downgrade to sell and target cut to €9.00 from €10.90 at Citigroup.