European Indexes End Mixed

A roundup of Thursday's action on major European exchanges


The FTSE 100 ended flat as M&A news in the mining sector was offset by weakness in the banking sector. The BoE and ECB left interest rates steady at 4.75% and 4%, respectively. Wall Street trades mixed after Fed Chairman Bernanke said the economy faces risks from inflation. WTI climbs above US$97.50/bbl. In the commodities sector, RIO TINTO (+21.75%) surged after it rejected an all-share offer from BHP BILLITON (-5.69%). Further in takeover activity, MITCHELLS & BUTLERS (+3.28%) gained on talk that Elpida may raise its stake. Pub companies were also in demand on good figures from PUNCH TAVERNS (+2.82%), which uncorked a forecast-beating fiscal pretax profit. In earnings among financials: private equity group 3I (unch) unveiled first half gross return of 14.3%. The world's largest listed hedge fund MAN GROUP (-0.81%) posted 21% rise in first half pretax profit. OLD MUTUAL (-0.97%) reported a 13% rise in nine months life sales, but a weak US$ and ZAR weigh. Among telecoms, BT GROUP (-4.21%) dialled up a 2% rise in core earnings in second quarter, just ahead of estimates. CARPHONE WAREHOUSE (+0.35%) rang up a 25% rise in first half DPS. In other sectors, INTERNATIONAL POWER (+1.89%) said profit in the first nine months rose 12%. Banks such as RBS (-5.255) and BARCLAYS (-5.31%) suffered after yesterday's subprime writedown from Morgan Stanley.


The CAC 40 (-0.91%) closed firmly lower, as Wall Street traded in the red with Fed Chairman Bernanke giving testimony before Congress. The ECB left interest rates steady at 4%. Paris was buried under a flurry of results: BNP PARIBAS (-0.27%) posted consensus-beating third quarter revenues of €7.69 billion, up 12.6% year-over-year, adding CIB's exposure to US subprime risk is 'negligible.' Staying with financials, AXA's (-2.88%) nine months revenues arrived in line, though Life & Savings saw a weaker third quarter. In further results, EDF's (-2.14%) nine months sales disappointed, coming in at €42.6 billion (up 1.4% on organic basis). Noted mild weather in first half07. LAFARGE (-0.54%) posted forecast-beating third quarter results. Le Figaro reported this morning that Lafarge rejected a merger offer from SAINT GOBAIN (+1.16%), though it did not cite sources. EADS (+5.59%) fared well despite reducing fiscal 2007 guidance to EBIT breakeven at third quarter results. CEO Louis Gallois told BFM Radio the aerospace player will have to make c.€1 billion further cost cuts in response to US$ weakness. EADS stakeholder LAGARDERE (-1.07%) posted nine months sales of €6.214 billion, beating consensus. ALSTOM (-7.17%) saw profit taking after upping guidance at first half results. AIR France (-1.25%) reported October traffic fell 0.7%, reflecting the impact of the cabin crew strike. In the wider market results, M6 (-1.86%) last night posted nine months sales of €983 million, up 5.7% year-over-year.


The Ibex 35 ended as Europe's strongest performer, with SANTANDER contributing 101 points to the Ibex's 103.8 point gain. Wall Street was trading flat-to-lower as Cisco's disappointing outlook weighs on techs. M&A news in the mining sector added a bright spot. Both the ECB and BoE left rates unchanged. Locally, SANTANDER (+3.88%) jumped on news it is selling Antonveneta to Monte Paschi and so does not need to carry out the expected capital increase to fund the ABN deal. ACCIONA (+6.07%) soared after Deutsche Bank reinstated coverage with buy. Other stocks with renewables exposure also found favor: SOLARIA (+5.73%). Elsewhere, results were the focus of the day. REPSOL (-0.26%) delivered third quarter proforma adjusted operating profit of €1.299 billion and net profit of €670 million, beating forecasts, though numbers are weaker year-over-year. ABERTIS (-0.13%) unveiled in-line nine months results and said it expects fiscal 2007 net profit up 28%. SOL MELIA (+2.13%) posted nine months EBIT up 4.9% to €192.7 million. SACYR-VALLEHERMOSO (-1.2%) said experts value its infrastructure unit Itinere at €11 billion and Sacyr will retain at least 51% of Itinere after the IPO. BAA's seven UK airports handled a total of 13.2 million passengers in October, up 3.5% year-over-year; FERROVIAL (+0.42%).


All Nordic exchanges closed in the red, as negative sentiment dominated Wall Street after Fed Chairman Bernanke commented cautiously on growth and inflation at a testimony before Congress. Regarding financials, Morgan Stanley's US$3.7 billion subprime writedown weighed on the market, NORDEA (-0.84%) and DANSKE BANK (-1.51%). Back in Europe, BoE and ECB left interest rates steady at 4.75% and 4% respectively. Locally, NORSK HYDRO (+2.87%) and BOLIDEN (+5.58%) rose amid sector merger talks: BHP Billiton said it has again approached Rio Tinto board regarding a merger proposal, after being rejected last time around. In earnings, OKOBANK's (-7.15%) third quarter pretax profit rose year-over-year but came in below forecast. Elsewhere, WILLIAM DEMANT (-1.77%) cut fiscal 2007 EBIT forecast to DKK1.375 billion-DKK1.425 billion vs DKK1.425 billion-DKK1.5 billion previously. OLD MUTUAL (-2.69%) confirmed at its nine months release it is in discussions with Royal Bafokeng Holdings regarding sale of its controlling interest in Mutual & Federal Insurance. On a more positive note, ASSA ABLOY (+3.75%) unlocked a forecast-beating third quarter and reiterated continued strong organic sales growth. INTRUM JUSTITIA (+12.21%) surged after third quarter results also came in ahead of forecasts. In other news, Sports Direct sold its 12% share in AMER SPORTS (-7.92%), sending the stock lower. In key broker action, Carnegie and Exane raised valuation for CARLSBERG (-1.16%).

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