business

European Indexes Finish Higher

A roundup of Monday's action on major European exchanges

London

The FTSE 100 closed slightly higher helped by firm mining stocks and a positive Wall Street. The tech sector got a boost after forecast-beating fiscal figures from IBM. Back home, British factory gate inflation hit a 16-year high, with December output prices rising 0.5%, taking the yearly rate to 5%. Also, UK house prices rose 9.5% year-over-year in November, according to govt data. Sterling hit an all-time low vs the EUR. £ = US$1.9591. Gold was above US$900/oz. WTI moved to US$94.20/bbl. In company news: SCOTTISH & NEWCASTLE (+0.68%) reported in-line current trading. The Sunday Times wrote that Anheuser-Busch has approached S&N about helping it in any bid for full control of BBH. In construction news, M&S (+1.00%) signed a property deal with HAMMERSON (+9.80%) for a retail development in Leeds. BALFOUR BEATTY's (-2.86%) 2007 results will be at the top end of expectations, but profit-taking took down the shares. In the retail segment: DEBENHAMS (+14.76%) is tipped to shrug off retail sector gloom this week with news of a forecast-beating rise in like-for-like sales over the festive period, The Sunday Times wrote. JJB SPORTS (-1.50%) said second half pretax profit will slip year-over-year and cautioned on 2008 outlook. TED BAKER's (+3.97%) pre-Christmas retail sales rose 12.5%. Further, N BROWN (+15.25%) reported a 14% jump in group sales (total & like-for-like) in the 20 weeks to 12 January.

Paris

The CAC 40 (+0.60%) closed the session into the black while Wall Street trades in positive territory amid strong profit numbers for IBM. of local note, STM (+4.35%) gained. Elsewhere, ALSTOM (+4.69%) may sign a c.US$1.2 billion contract to build Argentina's first high-speed railway between Buenos Aires and Cordoba, Le Parisien reports. Traders noted market rumour having it that Colony may take a further €1 billion stake in ACCOR (+3.48%). On the downside, CREDIT AGRICOLE (-0.27%) announced this morning its intention to sell its 2.07% stake in SUEZ (-1.14%). The bank plans to sell to institutional investors at €45 per Suez share, Reuters reported. GDF (-1.62%) which will merge with Suez also fell. In other news, GDF will today sign a partnership agreement with Qatar Petroleum, Bloomberg reported, citing a GDF spokeswoman. French President Nicolas Sarkozy yesterday confirmed plans to sign a nuclear cooperation agreement with the United Arab Emirates. TOTAL (+0.53%), Suez and AREVA (-1.21%) could build two, 3G EPR nuclear plants in the United Arab Emirates, according to various press reports. Total also benefited from a SocGen upgrade to buy from hold. In the wider market, EIFFAGE (+7.31%) soared following an upgrade to accumulate from reduce at Oddo.

Frankfurt

After the closing bell, Xetra-Dax (+0.18%) was able to look back to a positive trading day, as Wall Street continued to climb amidst encouraging results from IBM. German chip stocks INFINEON (+2.51%) and EPCOS (+3.04%) rose in the wake of the news. SAP (+2.71) rose on the back of its fourth quarter software sales, which were at €1.41 billion, better than expected. VIVACON (+16.02%) said 2007 net profit will be within guidance of €54-58 million and reckoned 2008 earnings will amount to more than €60 million. SYMRISE (+3.80%) confirmed its 2007 sales growth target and predicted a dividend payout of 30-35% of net income. In M&A news, there was renewed talk of a merger of department store chains Kaufhof, which belongs to METRO (-0.04%), and ARCANDOR's (+2.81%) Karstadt. Other rumours had it that Hitachi is eyeing SOFTWARE AG (+5.04%). IVG (+6.95%) rose on rumours that CBRE may be looking to bid €27.50/share. Talk did the rounds that the Asbeck family is upping its stake in SOLARWORLD (+1.17%). In turnover news, VW's (+2.42%) 2007 group vehicle sales were 7.9% higher at a record 6.189 million units, as merger talks between MAN (+1.23%), VW and Scania are set to continue. FRAPORT's (+0.82%) December passenger traffic rose 3.4% year-over-year. A number of brokers have upped their targets on DEUTSCHE BOERSE (+2.77%) but weighing on the index was MERCK (-3.

19) after Goldman Sachs removed it from its conviction buy list.

Milan

Piazza Affari ended Monday's session comfortably higher, with Wall Street trading in the black amid rate-cut hopes and after IBM reported better-than-expected preliminary results. Back home, AZIMUT (+6.6%) rallied as its board approved the earlier reimbursement for all of the 95,900 convertible bonds expiring in 2009 for €134 million. Kazakhstan's KazMunaiGas reached an agreement with the ENI-led (-0.08%) consortium over developing the Kashagan oil field which will see the former nearly double its stake to equal that of the biggest investors in the project. TISCALI's (-4.79%) CEO said the telco will mull over a dividend payout for 2009. FIAT (+3.03%) has delayed the sale of Alfa Romeo models in the US by one year to 2010. Amongst banks, Banco di Sicilia's CEO Gianni Puglisi and region of Sicily governor Toto Cuffaro will meet tomorrow with UNICREDIT's (+0.44%) CEO Alessandro Profumo to persuade him to jointly name the board members of Banco di Sicilia. Il Sole 24 Ore wrote that UNICREDIT should close the sale of its 2% in RCS MEDIA (+2.26%) on 18 Jan. The paper also wrote that MEDIOBANCA (-0.24%) is expected to report fiscal 2007 net profit in line with the €953 million posted last year. On the broker front, Bear Stearns downgraded TELECOM ITALIA (-0.44%) to underperform. Lehman initiated coverage of MAIRE TECNIMONT (+1.94%) with overweight and €5.30 target price.

Nordics

Nordic bourses closed in positive territory with Stockholm's blue chip index (+2.03%) top performer, followed by the Copenhagen (+1.8%). NOKIAN RENKAAT (+8.76%) and SKF (+5.79%) were among the index leaders. Wall Street traded higher as IBM posted fourth quarter results above market expectations. In Europe, the earnings season is under way, with ERICSSON's (+3.06%) j/v Sony Ericsson reporting fourth quarter on 16 January. Carnegie argues Sony Ericsson will continue to expand its market share at the expense of ASP and margins. The broker action was in focus; TOPDANMARK (+4.51%) surged as Handelsbanken upgraded to accumulate. STATOILHYDRO (+0.26%) benefited from an upgrade to buy at SocGen. H&M (+3.03%) edged up as Merrill added the stock to its Retail Most Preferred List. SAAB (+3.4%) outperformed as Goldman raised its rating to buy. NEUROSEARCH (+5.81%) continued to rise as JP Morgan initiated with overweight. In M&A news, merger talks between SCANIA (+4.67%), German MAN and VW will carry on, VW's CEO reportedly stated at the North American International Auto Show in Detroit. Elsewhere, Maus Freres will not extend its offer for GANT (+2.3%) after the bid period expired on Friday. Finally, SAMPO (+0.05%) has raised its share in NORDEA (+0.2%) to 9.2% vs 8.6% previously. Including subsidiary Sampo Life's 0.4% holding, Sampo's share now amounts to 9.6%.

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