European Indexes Higher
The FTSE 100 is modestly higher at mid-day, as better-than-expected results from US groups Oracle and Nike after the US closing bell help sentiment. The corporate agenda is thin today but triple witching, when September stock options, index options and future contracts expire, could add volatility. NORTHERN ROCK (+0.43%) remains in focus, albeit off its early highs, after The Times reports that RAB Capital, a hedge fund, has bought a 6% stake in the group. Meanwhile, The Daily Telegraph says Northern Rock rejected an offer of emergency funding from JP Morgan. BG GROUP (+1.18%) attracts interest after a discovery in Brazil. Sticking with the sector, PREMIER OIL (+2.24%) rises following an upgrade to outperform at Credit Suisse. ROYAL DUTCH SHELL (+0.24%) will expand its Motiva Port Arthur refinery. AVIVA (+0.65%) announces that Tidjane Thiam, the group's executive director for Aviva Europe, has decided to resign in order to become PRUDENTIAL's (+2.04%) finance chief. VODAFONE's (+1.35%) CEO Arun Sarin is confident that the company will 'absolutely' get another chance in the next six to 12 months to receive a contract to distribute Apple's iPhone. FILTRONIC (+6.33%) jumps after it says sales from continuing operations for 1Q are ahead of the same period last year, while the company reiterates its intent to return cash to shareholders.
The CAC 40 (+0.27%) trades in the black at mid-session, with US futures pointing to a healthy open on Wall Street. Oracle and Nike published solid results after the close stateside. Locally, car makers RENAULT (+3.41%) and PSA (+0.62%) outperform. Goldman Sachs says European autos is one of the best performing sectors in 2007 and the broker reiterates its conviction buy stance on Renault. ARCELOR MITTAL (+1.63%) makes gains following a Lehman Brothers initiation with overweight. In related news, the steelmaker plans to bid for coal assets in Siberia's Sakha republic, according to local media reports. ALSTOM (+2.27%) regains the week's losses. There has been recent speculation about its future role in the French nuclear sector. FRANCE TELECOM (+0.57%) wants to set up a j/v with Sagem and Thomson in order to find common operating standards for their electronic devices, Les Echos reports. In negative territory, Lehman Brothers and UBS trim PERNOD RICARD (-2.16%) targets. Despite in line FY operating results, recent fx moves weigh on brokers' FY08 estimates. Elsewhere, ICADE (sus.) agreed to merge with its four property subsidiaries and to extend the SIIC status to itself. The stock is suspended. France and DASSAULT AVIATION (-3.14%) may fail to sell 18 Rafale fighter planes for EUR 2.3bn to Morocco after the US made a cheaper rival offer to supply F-16 jets, La Tribune reports.
With triple witching adding volatility to today's trading, Xetra-Dax (+0.19%) is a touch higher midsession Friday. In overnight earnings news from the US, SAP (+0.36%) saw arch rival Oracle report a 25% rise in quarterly profit, beating the consensus estimate, but forecast slower growth in sales of new software in the current quarter. ADIDAS's (+0.2%) main competitor, Nike, posted a 51% rise in quarterly net profit, with the bottom line supported by a tax benefit and a boost to revenues from a weaker US$. Back at home, there is talk of SIEMENS (+3.52%) spinning off its Osram lighting unit. DEUTSCHE BOERSE (+2.73%) has applied to expand its foreign equities clearing and settlement services. FMC (+0.38%) reiterated its goal of more than US$9.5bn in sales this year and more than EUR 11.5bn in 2010. THYSSENKRUPP (+1.91%) still expects 2006/07 revenue of more than EUR 50bn. INFINEON (+1.35%) has set the price for its secondary Qimonda offering of 25m ADSs to US$10.92, valuing the overall issue at about US$194m. COMMERZBANK (-1.79%) is considering buying IKB (-0.07%), depending on whether or not the state puts the troubled bank up for sale. KLOECKNER & CO. (+1.96%) has signed an agreement to buy Scansteel Service Center Inc.'s steel distribution business. Key broker action includes Goldman Sachs downgrading HEIDELBERGER DRUCK (-1.04%) to neutral.
The Ibex 35 remains stronger at midday amid gains in utilities and SANTANDER. US futures point higher following last night's solid results from Nike and Oracle. Note that triple witching today could cause some volatility. Of local interest, General Electric has presented an offer for all the real estate assets that SANTANDER (+0.75%) has put up for sale, according to Expansion. Adds the assets are valued at EUR 4bn. TELEFONICA (+0.26%) is preparing the way towards reaching a 10% stake in China Netcom, writes La Gaceta. REE (-1.19%) is studying forming an alliance with Portugal's REN to enter the Brazilian market, reports La Gaceta. SERVICE POINT (+3.36%) has bought digital reprographics firm Quality Impres for EUR 1.8m including debt. In broker moves, Merrill Lynch upgrades UNION FENOSA (+1.64%) to buy while IBERDROLA (+0.95%) benefits from an upgrade to outperform from Exane. Caja Madrid says the risk to FERROVIAL (+1.71%) from the refinancing of the BAA debt is small.
General trading sentiment turns positive at mid-session as US futures point higher. After the bell last night, there was a positive tone as Oracle and Nike both revealed better-than-expected results. All the Nordic indices trade higher, with Helsinki still being Europe's best performer. OMX (+2.90%) is once again a focal point as QIA reiterates it has bought
20% in LSE and an significant amount of shares in the Nordic exchange operator for 'strategic' purposes. Meanwhile, the Swedish financial watchdog is considering launching an investigation into alledged insider trading in OMX shares on Wednesday, one day before the announcement of the agreement between Nasdaq and Borse Dubai, Dagens Nyheter reports. Elsewhere, NOKIA (+1.03%) benefits from positive comments from Cheuvreux. STORA ENSO (+7.29%) soars on news it is selling its North American paper business for US$2.52bn. NOVO NORDISK (+0.31%) has received approval from the European Commission for use of the rapid-acting insulin NovoRapid. In broker activity, ABN initiates coverage of H&M (+1.52%) with a buy recommendation. OUTOKUMPU (+3.23%) cheers as Deutsche rewards the stock with an upgrade to buy, while ELECTROLUX (-1.77%) falls as Goldman cuts its target objective on the stock.