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European Indexes End Lower

A roundup of Monday's action on major European exchanges


The FTSE 100 closed sharply lower tracking falling US indices after AIG got a rebuke over its method of valuing credit derivatives. At home, financials weighed, as STANDARD CHARTERED (-3.00%) said the liquidity plan for its SIV, Whistlejacket, has lapsed. Further pressure came from bearish comments out of the G7 meeting in Tokyo, coupled with fears that the US is slipping into a recession. Datawise, UK PPI for January rose faster than expected, cooling hopes of a rate cut. WTI was at US$93.61/bbl. Among gainers, GLAXOSMITHKLINE (+1.31%) received a boost after UBS upgraded the drugmaker to buy from neutral arguing the sell-off following the 2008 guidance was overdone. COMPASS (+1.23%) also benefitted after Credit Suisse raised the price target to GBP4.15/sh from GBP4/sh, along with FY08 EPS estimates on currency moves. In M&A news, FRIENDS PROVIDENT (+0.53%) reportedly rejected a new approach from JC Flowers. In company news, BRITISH ENERGY (-1.42%) may shock the market with a drastic cut in its production target when it publishes a trading update next Wednesday, The Times wrote. PENNON (+0.83%) said turnover, operating profit and PTP are in line with expectations. GCAP MEDIA (-2.90%) said it will target u/l op profit margin in the range of 12-14% for year ending March 2009. SMITHS GROUP (-1.48%) said will post sales and profit growth for 1H in line with management expectations.