European Indexes Finish Higher

A roundup of Friday's action on major European exchanges


The FTSE 100 (+2.11%) closed the final day of the trading week with strong gains, buoyed by better-than-expected US jobs data and stronger-than-expected factory orders. Wall Street was trading higher, with Sun Micro weighing on the NASDAQ. At home banks, energy and oil stocks were the best performing sectors. WTI moved to US$115.75/bbl. In macro news, UK house prices fell 1.3% m/m in April and are down 0.9% y/y for the 3M to April. Texas Pacific Group was said to bid for ROYAL BANK OF SCOTLAND's (+5.56%) GBP8bn insurance arm - a move which would dash fears that private equity players are struggling to finance major takeover deals, The Daily Telegraph reported. BARCLAYS (+2.37%) COO Paul Idzik resigned and will be leaving the bank later this year. HSBC (+1.14%) said police are investigating an alleged EUR 90m (GBP70m) attempted fraud, The Times noted. Key for the likes of UNILEVER (+1.24%), Kraft Foods said it planned to cut portion sizes in an effort to keep prices down and reported a 13% fall in 1Q profits. RENTOKIL INITIAL's (+2.12%) 1Q adjusted PTP fell 58.8%. The firm added that City Link woes persist and would review the 2008 DPS payout. In broker action, WHITBREAD (+4.76%) benefitted from an upgrade to buy at Citigroup which added that the company had been overly penalised for its UK consumer exposure.


The CAC 40 (+1.46%) closed higher, with Wall Street trading in the black. Non-farm payrolls came in better than expected and the Fed has made further moves to aid the credit markets. Back home, financials gained. BNP (+2.99%) and SOC GEN (+4.04%) benefited from a Credit Suisse note maintaining an outperform stance on the former and lifting target on the latter. RENAULT (+6.24%) enjoyed April sales data showing a 7.7% hike. PEUGEOT (+3.22%) saw an 18.7% jump. AIR FRANCE-KLM (+4.66%) climbed, with at US$115.96/bbl, off recent highs. Sector excitement over reports yesterday that BA is in talks regarding a possible alliance with US airlines also buoyed the stock. Elsewhere, UBS has introduced a short-term sell stance on EADS (+5.45%), but reports have Airbus beating rival Boeing in securing April orders. ARCELOR MITTAL (+1.36%) has sold its 17.4% stake (509.8m shares) in China Oriental to ING Bank and Deutsche Bank at HK$5.7938 per share. The steel firm also unveiled plans to award stock options and establish an employee share purchase scheme. In the wider market, SAFRAN (+6.36%) has won a contract to supply Malaysia with the latest version of its MetaMorpho 4.0 automated fingerprint identification system (AFIS), for use in criminal cases. NEUF CEGETEL's (+0.06%) 1Q sales came in at EUR 908m, up 13% y/y.


Xetra-Dax (+1.36%) closed firmly higher, above 7,000, as the DJIA added to yesterday's gains on better-than-expected jobs data. On the local corporate news front, SAP (+0.19%) will reportedly customize its software for use on BlackBerry. DAIMLER's (+0.8%) US sales of Mercedes-Benz cars slipped 3% y/y in April to 20,271 vehicles. VW's (+0.04%) US sales of cars and light trucks fell 6.1% adjusted for the number of selling days to 19,415 vehicles for the same month. BMW (+3.89%) reported April US vehicle sales up an adjusted 1.2% to 31,448 units, while PORSCHE (+4.26%) saw its North American deliveries slip 5% to 3,099 units. In other news: Royal Dutch Shell may sell its 33% stake in the world's biggest offshore wind farm project as it is reviewing its strategy for renewable energy. Partners E.ON (+0.39%) and Denmark's Dong Energy say the project is now on the knife's edge. ALLIANZ (+1.97%) is mulling a big acquisition in general inusrance the UK, according to the FT, citing board member Clement Booth, while K+S (-0.08%) may be interested in DSM's fertilizer business if it were up for sale, writes the FTD, citing head of investor relations. Renewed talk of a EUR 25 per share bid for PRAKTIKER (+6.46%) in the offing pushes the DIY store operator higher. Finally, ComBOTS has sold 1m UNITED INTERNET (-0.95%) shares, but said it intends to keep a substantial investment in the group.


The Nordic benchmark indices ended the week's last session in the black as Wall Street gained amid better-than-anticipated non-farm payrolls along with an upwards revision of March factory orders. Of local note, ERICSSON (-4.78%) fell on concerns 1Q gross margin was overstated. According to Lehman, gross margin increased 75bp not 250bp; broker says additional analysis suggests that IPR may have driven 200bp of the 250bp sequential increase. Earnings-wise, after Wednesday's close, KAUPTHING (-2.84%) disclosed 1Q numbers below expectations. One trader stated, excluding a one-off gain at ISK15.9bn that Kaupthing delivered a 'disastrous report', which on all levels came in less than expected. The Icelandic bank said focus on liquidity is management's key priority. Further in financials, SEB's (+4.12%) CEO says she wants the bank to grow stronger within capital investment and is looking east for possible add-ons, and says a merger with NORDEA (+4.54%) is not on the cards at present. DANSKE BANK (+2.41%) saw its rating downgraded to neutral at Carnegie. In further broker action, Goldman increased its target for TELENOR (+6.55%).


Piazza Affari ended sharply higher as Wall Street trades mixed following better-than-expected non-farm payrolls in April and the news that the Fed Reserve widened the funding it offers to banks. Back home, the Brazilian investment fund Multi-Long Corporation offered EUR 1bn to acquire ALITALIA (+9.49%), according to Il Sole 24 Ore. Separately, the carrier filed a counter-claims for damages against Milan's airport operator SEA. On a similar note, Whirlpool filed a lawsuit against DE LONGHI's (+1.14%) unit, Kenwood, alleging infringement of the shape of the KitchenAid stand mixer. PARMALAT (+1.77%) reached an agreement to settle an investor class action suit against it in the US Court of NY. In other news, Bolivia's President Evo Morales announced the nationalisation of TELECOM ITALIA's (+2.37%) unit, Entel, The Times reported. ENI's (+1.37%) CEO Paolo Scaroni proposed to create a European natural gas network company in a meeting with EU's Commissioner Neelie Kroes, according to La Stampa. Standard & Poor's raised its long-and short-term corporate credit ratings on FIAT (+3.72%) to 'BBB-/A-3'. In broker action, UBS upgraded MONTE PASCHI (+2.01%) to neutral and lifted target to EUR 2.20.

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