European Indexes Finish Higher

A roundup of Thursday's action on major European exchanges

LONDON

The FTSE 100 (+0.65%) finished the day with minor gains, off earlier highs, as Wall Street traded mixed with only the NASDAQ trading higher, stunned by the weakest Philly Fed index since 2001, which came in at -24 vs a consensus of -11. At home, miners gained because of strong metal prices and renewed M&A rumours. Press reports from Brazil suggested Vale increased its offer for XSTRATA (+2.86%) to US$89.30bn. BAE SYSTEMS (+1.27%) posted strong FY numbers with operating results at the top end of estimates. The group expected good growth in 2008. CENTRICA (-3.90%) unveiled FY earnings above consensus and raised final DPS to 9.65p. REED ELSEVIER (+7.45%) published FY07 sales of GBP4.584bn, in line with consensus, and said it expected cost saving for 2008-11 of GBP245m. SHIRE (+2.42%) climbed on better-than-expected FY earnings. At KINGFISHER (+2.65%) B&Q's LFL fell 1.7% in 4Q, worse than expected, but performance in France was strong. SABMILLER (+1.29%) said that it had looked at SCOTTISH & NEWCASTLE (-2.54%) but decided against taking any action. ALLIANCE & LEICESTER (-2.54%) fell further as brokers downgraded the stock after its profit warning. BSKYB (+2.23%) said it would challenge the Competition Commissions's findings on its stake in ITV (+1.7%). In the broader market, TOMKINS' (+2.02%) FY PTP beat estimates, but said the outlook is challenging.

PARIS

The CAC 40 (+0.96%) closed the session higher, but off intraday highs as Wall Street trades mixed following the Philly Fed business activity index slumping to its lowest level since 2001. Locally, SOCGEN (-2.02%) bucked the trend as it reported 4Q net loss of EUR 3.35bn. FY07 net income came in at EUR 947m vs. EUR 5.22bn in 2006. Numbers were in line with consensus but SocGen also suggested there could be further write-downs in 1Q08. Other financials gained following suggestions the Fed could cut rates further: BNP (+3.35%), CREDIT AGRICOLE (+1.02%). Elsewhere, ARCELOR MITTAL (+4.40%) announced a further price increase for its flat-carbon products in Europe of EUR 40/t. An administrative court in Lazio province, Italy, rejected the lawsuit filed last month by Air One to halt AIR FRANCE-KLM's (-0.11%) exclusive talks over the privatisation of Alitalia. In broker news, JP Morgan downgraded EDF (-1.13%) to underweight from neutral and upgraded SAINT GOBAIN (+3.97%) to overweight from neutral. In the wider market, ERAMET (+11.90%) unveiled FY07 turnover of EUR 3.792bn, +24%; current op. income EUR 1.196bn, +97%. TECHNIP (+3.95%) tabled 4Q07 op. loss of EUR 108m, higher than expected and in-line FY op. income of EUR 247m. Raised 2007 DPS to EUR 1.20. TF1 (-4.92%) posted FY07 revenue of EUR 2.763, +4.1%, net profit from continuing operations of EUR 227.8m, +14.6% but lower than expected.

FRANKFURT

Xetra-Dax (+0.07%) closed flat, off intra-day highs, after reaching the 7,000 level as major blue chips delivered earnings. Wall Street trades flat-to-lower after a disappointing reading of the Philly Fed index. Of local note, News Corp said it increased share ownership in PREMIERE (+4.35%) to 19.9% from 14.58%. THYSSENKRUPP (+4.44%) and SALZGITTER (+3.73%) advanced on hopes of price increases to offset a spike in iron ore prices, after peer ArcelorMittal announced it is raising prices of its flat carbon products. ALLIANZ (+0.81%) reconfirmed FY op. profit of EUR 10.9bn and net income to EUR 8bn. The group is said to be joining a bidding war for POSTBANK (+0.22%), according to FTD. Elsewhere, BASF (-1.77%) reported FY EBIT excl one off items comes in at EUR 7.61bn, also in line with consensus, and forecast another year of record earnings for 2008. CONTINENTAL (+3.64%) reported 4Q (excl VDO) with revenue of EUR 4.04bn, EBIT of EUR 502.2m and EBIT margin of 12.4%. 4Q net income (after minorities and incl. VDO) is at EUR 1.02bn. In the wider market, PFLEIDERER (+2.26%) reported FY sales of EUR 1.8bn, in line with consensus. EBIT came in at EUR 136.8m, slightly lower than expected. Away from earnings, CONERGY (+16.97%) rose as the co-founders of Hexal AG may be acquiring a stake in the group. The brothers have reportedly committed to 25% of the planned EUR 250m capital increase.

ZURICH

The SLI (+1.02%) closed higher but not quite at the highs seen during the session, as a sharp drop in the Philly Fed index re-ignited fears of a US recession. NESTLE (+3.49%) was higher as the food & beverages giant posted 2007 sales of CHF107.6bn, with organic growth of 7.4%. Nestle proposed a dividend increase of 17.3% to CHF12.20 per share and a 1-for-10 share split. The CEO reportedly said Alcon and Nestle don't need each other, referring to Nestle's 77% stake in the US-based eye care company. No decision was announced though. ACTELION (-2.8%) was among the few SLI losers as its 2008 outlook left a few analysts discontent. KUEHNE & NAGEL (+4.2%) gained on reports that Moller-Maersk is losing revenues to sea freight forwarders. UBS (+0.11%) revealed today that it plans to re-elect Marcel Ospel as chairman, but with a shortened term of one year. In fact, the terms of office of all board members will be reduced to one year, with UBS noting that this should offer shareholders with 'a more realistic choice'. Elsewhere SWATCH (+2.67%) and RICHEMONT (+2.41%) ticked up as Jan '08 Swiss watch exports rose 23.4% y/y to CHF1.211bn. In the broader market, Lion Capital announced it's taking a 32% stake in baker HIESTAND (+0.44%). KUDELSKI (+0.97%) and SONOVA (+2.14%) also advanced, following upgrades at UBS.

SPAIN

The Ibex 35 index (+0.71%) closed higher but off intraday-high while Wall Street trades mixed. Among the main movers of the day, BANKINTER (+5.58%) soared on news Bank of Spain allowed Credit Agricole to raise further its stake in the bank. SACYR-VALLEHERMOSO (+2.57%) won European Union's approval to buy Eiffage, according to Bloomberg. ANTENA 3 (-4.20%) posted 2007 net profit of EUR 200m, -31% y/y and average audience share +17.4% y/y, after losing viewers to Cuatro and La Sexta. In the real estate sector, RENTA CORPORACION's (-3.09%) net profit fell by 26% to EUR 35.4m, while ICD has asked COLONIAL's (-4.02%) core shareholders for an extension period to Feb. 27 to continue the due diligence process. BANCO SABADELL's (+0.83%) chairman Josep Oliu recently travelled to Tenerife to negotiate with Ram Bhavnani the possible purchase by the latter of a 5% stake in the bank, El Confidencial reported. ABENGOA (+0.96%) will build a 280 MW solar plant in Arizona. In broker news, Citigroup downgraded IBERDROLA (-1.57%) to hold after Wednesday's results. SocGen initiated on ABERTIS (+0.93%) with buy, while Caja Madrid upgraded SANTANDER (+0.86%) to buy.