European Indexes End Lower
London: FTSE stocks ended slightly lower Wednesday, recouping most of their early losses, as Wall Street rallied after a slow start. At home, AstraZeneca (AZN) (+2.43%) climbed, supported by bullish broker comments. Morgan Stanley upgraded the shares to overweight on compelling risk/reward. Leisure group Whitbread (+7.04%) soared on talk Starwood (HOT) could be mulling a bid, while Credit Agricole Cheuvreux International later disclosed that it held an 11.33% stake.
BSkyB (+4.17%) rallied after reporting a 17% rise in fourth quarter net customer additions. Unilever (UN) (+2.19%) extended yesterday's gains, with speculation today centering on a possible bid from Colgate-Palmolive (CP). Press reports linked Rio Tinto (RTP) (+2.25%) with a US$34 billion (US$90/sh) bid for Canada's Alcan (AL).
BG (+2.56%) gained on an upgrade to buy from sell by Goldman Sachs. 3i (-0.79%) said the year had started well and will carry out a £800 million capital return. Housebuilder Barratt (-0.46%) said fiscal total completions had risen by 6% to 15,517 and that it had seen good momentum on sales reservations. Burberry (-1.41%) reported first quarter underlying revenues up 30%, ahead of expectations. LSE (+0.22%) said it had made an excellent start to the financial year, with first quarter revenues rising by 19% to £100.1 million.
Paris: The CAC 40 (-0.30%) erased earlier losses but still closed in the red, a touch above the 6,000 line amid ongoing concerns over the US subprime sector. Meanwhile, Wall Street trades higher after yesterday's losses. Locally, financials BNP Paribas (-2.28%), AXA (AXA) (-2.00%) and SocGen (-2.11%) erased 10 index points. Conversely, Accor (+5.27%) soared on speculation KKR is to bid at €80 per Accor share.
Traders noted market rumor that Arcelor Mittal (MT) (+1.26%) is to bid for Vallourec (+5.22%) at €280 per share. Another rumor involving KKR pushed Air Liquide (+2.22%). Vinci (+2.15%) also rose. Yesterday, La Tribune suggested that Francois Pinault and Romain Zaleski could potentially join their effort on Vinci after Zaleski increased his stake in Vinci from 1% to 2%.
Carrefour (+0.90%) reported second quarter sales of €22.642 billion, +5.9%, just above consensus, with French sales at €10.4 billion. Citigroup upgraded to hold from sell. Alstom (-1.87%) is about to take over China's Wuhan Boiler. CEO Patrick Kron said to Les Echos that Alstom will make Wuhan Boiler a base for global exports. According to Les Echos, France Telecom (FTE) (-0.39%) is currently waiting for approval from the Indian GTL board for the sale of two of its units. Amongst the second liners, Safran (+0.72%) tabled first half sales of €5.733 billion, up 4.7%, above forecast.
Frankfurt: Xetra-Dax (-0.83%) closed in negative territory on Wednesday as subprime mortgage worries continued to trouble markets. However, the German benchmark pared some losses in late trade as Wall Street turned higher. The only outperformers on the Dax today were Bayer (BAY) (+1.43%) and Hypo Real Estate (+2.79%). The former saw an upgrade at Merrill Lynch, while the latter upgraded its fiscal 2007 outlook based on strong second quarter estimates.
Other stocks in the news included DaimlerChrysler (DCX) (-1.39%) as Reuters reported market talk of possible financing difficulties for the sale of the Chrysler division to Cerberus. Sportswear maker Adidas (-0.69%) sees limited damage from the possible loss of a deal to sponsor the German national soccer team, its CEO told Die Welt. RWE's (-0.48%) British unit npower announced it will start building the £190 million Rhyl Flats offshore wind farm in Wales, due to be 100% operational by mid 2009. The company selects Siemens (SI) (-1.48%) Power Generation to supply and install 25 turbines. Tire manufacturer Continental (-0.31%) is considering building a factory in China,a company official told Reuters. Schmack Biogas (+4.32%) increased its stake in Stelzenbergerto to 69%. The price of the additional 18.9% will be paid with 58,500 shares from a capital increase out of authorized capital.