European Indexes End Mostly Higher
The FTSE 100 closed well in positive territory Wednesday, helped by banking and mining stocks. WTI edged up to US$80.47/bbl after EIA said that crude stocks rose unexpectedly, while distillates fell last week. However, in the sector a 9% third quarter and fiscal estimates downgrade by Cazenove on oil giant BP (-0.36%) cooled oil stocks. In more positive news, private equity group JC Flowers has secured about £15 billion of funding which could be used for a takeover of NORTHERN ROCK (+11.36%), the FT wrote. Further among financials, HSBC (+2.80%) gained, tracking an overnight jump in Hong Kong. ROYAL BANK OF SCOTLAND (+3.44%) is preparing to defy the credit crunch by putting four hotels worth up to £650 million on the market, The Times reported. Also, a statement by Deutsche Bank that it expects a third quarter net profit of above €1.4 billion boosted sentiment. MAN GROUP (+1.52%) was in demand on news that its flagship Man AHL fund's NAV rose 2.18% last week. OLD MUTUAL (+4.43%) is to buy back shares worth £350 million. Commodity-wise, lead and copper rose on supply woes, helping miners. In other news, BSKYB (unchanged) could take legal action if it is forced into a loss-making sale of its ITV (-0.95%) stake. BRITISH AIRWAYS (+3.79%) September passenger traffic and load factor slipped.
The CAC 40 (+0.12%) closed the session modestly higher while Wall Street trades slightly lower. Locally, Le Figaro reported that the AMF has accused top EADS (-0.78%) executives and shareholders of 'massive insider trading', selling shares before the aerospace group unveiled problems at Airbus. Stakeholder LAGARDERE (-5.42%) was hit. TOTAL (-1.31%) would be subject to sanctions being considered against Burma, French foreign minister Bernard Kouchner reportedly told the National Assembly. Morocco could buy ALSTOM's (+0.83%) high-speed TGV train, reported La Tribune. CAP GEMINI (+2.33%) has signed a strategic alliance with Samsung. PSA (+1.52%) CEO Christian Streiff told BFM radio that French sales in September had been 'surprisingly good', reported Bloomberg. In the wider market, THEOLIA (-11.49%) disappointed with first half07 turnover. SocGen believes the lack of EBITDA outlook is an issue. SODEXHO (+3.92%) upped guidance after fiscal sales rose by 4.6% year-over-year. BUSINESS OBJECTS (+3.26) gained on renewed speculation SAP would bid for the company, offering €37/sh. PUBLICIS (+3.81%) was added to Goldman Sachs's Conviction Buy List. SAFRAN (-0.12%) faced investigation regarding allegations it presented inaccurate accounts, according to La Tribune.
Xetra-Dax (+0.11%) closed marginally higher, though with volumes lower than usual amid reunification day. Wall Street traded flat to lower at European close. Back home, banks were in recovery mode again. While taking charges on leveraged loans and loan commitments of up to €700 million, DEUTSCHE BANK (+2.12%) said third quarter net profit should exceed €1.4 billion. In other news: US regulators have approved a broadened label for MERCK's (+0.62%) Erbitux to include survival data for the drug's use as a single agent for advanced colorectal cancer patients who saw other drugs fail. On the M&A front, HYPO REAL ESTATE (+1.17%) has completed its acquisition of now-delisted Depfa, while there was renewed talk of SAP (+0.1%) eyeing France's Business Objects. TELE ATLAS (+0.35%) won't comment on whether or not it has received a competing offer to the one made by Holland's TomTom. Among autos, since VW (+0.74%) never denied market talk that it will bid for MAN (+3.85%), there was speculation that the company will make a statement tomorrow. Separately, VW's US turnover slid 5.9% in September, while DAIMLER's (+0.1%) sales of Mercedes-Benz cars and light trucks rose 17.5% year-over-year. BMW's (-0.95%) US vehicle sales were up 7% year-over-year in September. PORSCHE (+3.24%), which saw a target hike at UBS, achieved a 20% rise.
Nordic markets ended mostly lower, with Stockholm the exception.
Wall Street pared its early losses after the ISM non-manufacturing index came in broadly in line with expectations. Traders await ECB and BoE interest rate decisions tomorrow and US non-farm payrolls data on Friday. Back in the Nordic region, CARNEGIE (+3.61%) jumped on rumors that DnB NOR (-1.20%) is preparing to launch a SEK165 bid. Separately, Carnegie announced that it had asked the Swedish Minister for Financial Markets that the company be withdrawn from its assignment to assist the Swedish government in its sale of OMX (+0.36%) and SBAB. Meanwhile, SAS (+4.44%) soared as it said it would return the Dash8/Q400 aircraft into service, following an extensive inspection program. LUNDBECK (-4.21%) was the focus of much broker attention, following yesterday's 8.04% gain, when the group reported positive headline results for its new antidepressant compound, LuAA21004. ING and Deutsche Bank raised targets, while Carnegie upgraded the stock to neutral. In further broker action, Citigroup upgraded NORSK HYDRO (+2.99%) to buy and raised its target as it believes the stand-alone company offers plenty of upside. Meanwhile, QIA urged FI to deal with its filing regarding ownership of OMX rapidly, wanting an answer at the same time as Borse Dubai, Dagens Industri wrote. However, this is something FI is not prepared to do.
Spanish shares ended the session little changed with Wall Street trading modestly lower. The ISM services index was in line with forecasts. Of local note, FERROVIAL (+3.21%) finished as top gainer following the publication of the UK Competition Commission's proposals regarding Heathrow and Gatwick airports. The maximum charges per passenger proposed are above the recommendations made by the Civil Aviation Authority in March. Ferrovial said that if the CAA does not make changes to their proposals, there is a high degree of risk that the BAA refinancing plans might not be implemented as currently envisaged. TELEFONICA (-1.19%) said it is still interested in buying Portugal Telecom's stake in Vivo. PT said on Monday that it wants to buy Telefonica's stake in the Brazilian operator. It was another dismal day for VUELING (-17.18%) as Goldman Sachs downgraded to sell and cut target to €2.50. In further broker action, Deutsche Bank resumed coverage of INDRA (+2.81%) with buy. EBRO PULEVA (-0.63%) warned it expects to see a 'substantial' fall in revenues at its sugar business due to the EU's reform of the sector. PRISA (+0.14%) increased its stake in SOGECABLE (+0.71%) to 44.31%.