European Indexes End Higher in Volatile Session

A roundup of Thursday's activity on major European exchanges


The FTSE 100 closed higher supported by mining and energy stocks. Support also came from higher Wall Street stocks. WTI traded at US$92.91 a barrel following a US pipeline fire. At home, in company updates, ALLIANCE & LEICESTER (+7.55%) said core operating profit will be lower than the current range of analyst forecasts, hit by losses on Treasury investments. Mortgage lender BRADFORD & BINGLEY (+0.25%) said its fiscal underlying profit will be in line with current analyst expectations. KINGFISHER (-1.50%) posted third quarter retail profit of £171.7 million, ahead of analyst expectations, but added that it expects consumer demand to soften further. BRITVIC (+2.81%) reported a 9.7% rise in fiscal pretax profit, but said conditions in the soft drinks market continue to be challenging. UNITED UTILITIES (+2.21%) said first half operating profit rose 5% and will return £1.5 billion. MITCHELLS & BUTLERS (-6.04%) fell after unveiling fiscal pretax profit of £207 million, down 0.5%, saying the outlook for consumer spending remains uncertain. The company put its property deal on hold. In macro data, UK October mortgage approvals fell to their lowest in three years.


The CAC 40 (+0.66%) closed a volatile session in positive territory. Meanwhile, Wall Street trades slightly higher. This side of the pond, financials added support: BNP PARIBAS (+1.63%), SOCGEN (+1.65%). Elsewhere, JP Morgan initiated ARCELOR MITTAL (+2.78%) with outperform and €55 target. SCHNEIDER (+2.67%) raised fiscal 2009 sales target for its Critical Power & Cooling Services Business unit to US$4.3 billion-US$4.5 billion. PSA's (+2.36%) 4x4 models launched in mid-July are ahead of sales targets, Le Figaro reported. The construction sector was also in fine fettle: LAFARGE (+2.51%), BOUYGUES (+2.10%). The latter has won a €500 million order to build and run two tunnels in UK. On the downside, France TELECOM (-0.92%) weighed heavily after yesterday's surge ahead of the release of the iPhone. SANOFI (-0.21%) increased its stake in US Regeneron. AIR France-KLM (-3.43%) also fell amid rising oil prices. WTI jumped c.2% to c.US$92.65/bbl after an explosion at an Enbridge pipeline from Canada to the US. TOTAL (+0.87%) added six index points.


Xetra-Dax (+0.54%) ended the session higher on Thursday, as Wall Street was trading flat to higher, amid rising oil prices on a US pipeline fire. Of local note, THYSSENKRUPP (+2.33%) was once again subject of market rumours POSCO is planning a bid, albeit denied by the South Korean steel maker. FMC (-1.31%) has agreed to acquire Renal Solutions for a total consideration of up to US$190 million. DEUTSCHE BOERSE (+0.66%) will sell Clearstream's HQ in Luxembourg for €350 million to IVG IMMOBILIEN (+1.96%) in a sale-and-leaseback deal. SIEMENS (+1.46%) is paring the size of its board and realigning its operations into three sectors. This is the first major move by new CEO Peter Loescher. MERCK (+2.22%) receives positive data results for both Erbitux and Cyanokit. IKB (-1.24%), having hit an all-time low this morning, is higher now on hopes the announced banking pool will rescue it from subprime woes. On the earnings front, PROSIEBEN (+4.14%) reported solid third quarter EBITDA of €124.8 million. The broadcaster believes it may beat the consensus view for 2007. Finally, Apax is examining various options for VERSATEL (+8.6%), including a sale, a merger with UNITED INTERNET (+3.25%) or buying more telecom assets, according to reports.


Spanish shares ended the session in the black amid gains for BBVA (+1.51%) and IBERDROLA (+1.26%). Wall Street edges onto positive terrain at the European close, after some mixed macro data. Spanish inflation reached 4.1% in October, an 18-month high. BANKINTER (+3.82%) gained as Jaime Botin has asked for authorisation to reach a 29.9% stake in the bank. Meanwhile, Credit Agricole's CEO, Georges Pauget, has reportedly said the French bank does not plan to bid for Bankinter.

Negocio reports talk that Italy's ENI is planning to take a stake in REPSOL (+1.14%), allowing it to collaborate in the Spanish oil firm's strategic plans, but without influence on management. Repsol was also boosted by an upgrade to buy at Kepler. Following news yesterday that 3i and DERMOESTETICA (-0.11%) are in exclusive talks, Expansion writes that 3i wants to de-list the cosmetic surgery firm and double its size within five years. In other news, INDITEX (-1.18%) expects to double its presence in Russia in 2008 to 100 stores from the current 48, Cinco Dias reports. ACCIONA (+2.38%) has sold its 50% stake in La Compagnie du Vent for €265 million. Finally, Peter Erskine is to step down as head of TELEFONICA's (+0.66%) O2 Europe unit.


The AEX (+0.34%) closed higher at the end of a relatively volatile session, with Wall Street in positive territory. WTI was up at US$92.51/bbl on a pipeline fire in the US. Back home, China's No. 2 life insurer, Ping An Insurance, has taken a 4.2% stake in FORTIS (+1.98%) for US$2.7 billion. Staying with financials, ING (+0.58%) has taken €23.4 billion of assets from two funds invested in mortgages and corporate credit back on to its balance sheet, according to press reports that also cited an ING official as saying the bank will not have to absorb losses on the portfolio. Elsewhere, ARCELOR MITTAL (+2.78%) announced it is to build a 300,000 tonne p.a. pipe mill in Nigeria. JP Morgan initiated with overweight. VEDIOR (+1.65%) said it has signed an agreement to acquire 70% in German IT recruitment company GULP, which saw fiscal 2006 sales of €40.9 million. In the wider market, the standout story was BAM GROEP (+2.88%), the builder unveiling nine months turnover of €2.786 billion, up 18% year-over-year; operating profit of €235.5 million, up 122% year-over-year; and net profit of €192.6 million, up 181% year-over-year. Its order book remains at a 'high record level' and stood at €13.7 billion as of 30 September, 2007. BAM raised fiscal 2007 outlook, seeing net profit of at least €310 million from a previous €296 million view. In broker news, ING cut target on DRAKA (-3.02%) to €28; keeps buy.

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