European Indexes End Higher

A roundup of Wednesday's action in major European markets


The FTSE 100 closed higher with Wall Street in positive territory as three Dow components reported good quarterly numbers. WTI resumed its march higher, currently up US$0.88 at US$88.49/barrel amid fears of Turkish incursions into Iraqi-Kurdish territory. Among commodities, copper and tin prices fall. Further in the sector, RIO TINTO (-1.56%) drilled out a 30% rise in third quarter refined copper output, but mined copper fell 6%. UBS said the numbers were basically in line with expectations. M&A returned to spice up the beverage sector. Carlsberg and Heineken revealed they are in discussions regarding a joint cash bid for SCOTTISH & NEWCASTLE (+18.70%). The latter said the break-up bid was unwelcome. SABMILLER (+2.52%) and DIAGEO (+1.55%) gained. In company news, drinks group BRITVIC (+7.47%) said it is confident that fiscal profits will be within the range of current market expectations. AVIVA (-2.65%) said it is targeting £350 million of cost savings a year as a part of its plans to drive growth and unlock value. TATE & LYLE (+7.69%) sweetened up on reports that the EU is likely to approve the import of four GM crops. Panmure Gordon thinks this is a positive for the stock. BAE SYSTEMS (unch), BRITISH LAND (-1.39%) and SMITH & NEPHEW (+0.42%) traded ex-dividend.


The CAC 40 (+0.77%) ended solidly higher with Wall Street trading in the black. However, the Dow comes off early peaks as IBM, United Technologies and weak housing starts data weigh. At home, DANONE (+3.58%) posted third quarter sales growth of 3.9%; with third quarter Dairy sales growth of 11.9% and third quarter Beverages sales down 11.7%. CARREFOUR's (+2.91%) third quarter sales rose 5.5% to €23.109 billion. In further news, Carrefour is selling 17 wholesale outlets in northern Italy and 11 supermarkets in the southern region of the country and may raise more than €1 billion, Il Sole 24 Ore reports. ACCOR (-0.73%) said nine months revenues rose 6.3% to €6.12 billion. THOMSON (+3.66%) will sell its consumer electronics Audio-Video (AV) activities outside Europe and progress with closing its European Audio/Video and Accessories activities. ALCATEL-LUCENT (+0.91%) gained on a revived rumour CEO Patricia Russo is about to be replaced. ALSTOM (+2.2%), EDF (+1.1%) and AREVA (+2.23%) may sell nuclear plants when Nicolas Sarkozy visits China on 25 November, Les Echos reports. Market rumours had it that SOCGEN (+0.23%) is interested in DEXIA (+1.81%). France TELECOM's (+0.55%) unit Orange will sell Apple's iPhone for €399 (US$565) when tied to a contract with the mobile operator. TECHNIP (-5.18%) reportedly says it can create value without an M&A deal.


The Xetra-Dax (+0.29%) closed on positive ground as the DJIA came off intra-day highs after United Technologies gave a subdued outlook, and IBM showed weak hardware sales. Locally, INFINEON (+2.13%) surfed on Intel's positive wave. In pharma news, the FDA said a group of kidney disease drugs may be approved in a broader US patient population after FMC (+1.17%) and others presented a case for extending use of these drugs. MUNICH RE (-0.79%) was buying Midland Company, a provider of speciality insurance products, for US$1.3 billion. SAP (+1.83%) was buying Indian software group YASU for an undisclosed sum. DEUTSCHE POST's (+0.51%) DHL Express unit has landed Israel's Flying Cargo International Transportation for an undisclosed sum. DEUTSCHE TELEKOM (-0.67%) aims to sell Vivento Technical Services to Nokia Siemens Networks next week. LANXESS (+1.78%) expects to exceed its EBITDA margin of 10.5% this year. PFLEIDERER (+5.30%) affirmed its 2007 growth forecast. SOFTWARE AG (-2.88%) warned analysts to rethink their assumptions on exchange rates and timing of licence bookings, but added that its third quarter results are in the range of its own expectations. WACKER CHEMIE (-1.24%) stock was was under pressure on market talk that it may guide lower. This, however, was refuted. IKB (+5.58%) benefited from an upgrade to hold from sell, due to takeover speculation, at UniCredit.


Spanish equities ended Wednesday's session comfortably higher helped by positive results from US blue chips such as JP Morgan and Coca-Cola. Note that today's session was influenced by the performance of the main broadcasters like ANTENA 3 (+3.95%), TELECINCO (+2.31%) and SOGECABLE (+3.91%) which last night reported nine months EBITDA of €247 million and net profit of €50.3 million. The numbers were ahead of consensus. In the session oil prices moved over US$88/bbl. Spanish house price growth slowed to +5.3% in third quarter07 vs +9.8% in third quarter06. In corporate news, SANTANDER (+1.87%) benefited from Lehman Brothers resuming coverage with overweight. REPSOL (-0.58%) underperformed as UBS cut its target price to €25. Elsewhere, BANCO POPULAR (+0.16%) delivered in-line results, with nine months net profit up 15% to €929 million and NII up 12.2% to €1.73 billion. In other news, troubled airline VUELING (+6.19%) said it will hold an EGM on 26 November and added that the board has agreed to discuss strategic alternatives for the group. NATRA (+1.81%) agreed acquisition of Belgian chocolate firm All Crump for €45 million. TECNOCOM (+1.05%) announced it will carry out a capital increase of one new share for every five old ones in order to raise €46.6 million to help finance the acquisition of Getronics' Iberian division.


Helsinki finished Europe's best performing bourse, Copenhagen and Oslo ended well bid, while Stockholm slipped to breakeven. Wall Street attempted to recover from yesterday's fall, with the Dow flat and other US bourses higher at European close. Back in the Nordics, all eyes remained on ERICSSON (-1.59%) as brokers cut ratings and targets en masse following the profit warning yesterday, which Carnegie described as 'the closest thing to a telecom equipment Armageddon that we are likely to experience.' For instance, ABN said the telco is stumbling in the dark, while Morgan Stanley sees value for long-term investors. NOKIA (+3.23%) is set to deliver third quarter tomorrow and consensus looks for a 62% year-over-year rise in EPS. Nomura says Mobile phones looks good, but Networks does not. In M&A news, Heineken and CARLSBERG (+1.72%) said they are in talks regarding the formation of a consortium to make an offer for Scottish & Newcastle. Elsewhere, TIETOENATOR (+9.88%) soared as WestLB read the so-called profit warning as a statement of recovery, consequently upgraded to add. MARINE HARVEST (-6.67%) trimmed its third quarter harvest forecast due to disease in its Chilean stock. In earnings, TOMRA (+7.41%) gained following yesterday's third quarter release, showing strong EBIT and margin. STOREBRAND (-1.78%) delivered disappointing third quarter results in asset management. AXFOOD (-4.48%) released third quarter earnings with sales missing forecasts.

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