European Indexes End Mixed

A roundup of Tuesday's action on major European exchanges


The FTSE 100 closed slightly lower after April CPI jumped 3%, spurring worries that high inflation may further hit an already slowing British economy. More woe as BRC data showed LFL retail sales fell 1.5% y/y in April. Wall Street was lower as HP's deal to acquire EDS weighed, as well as Wal-Mart's poor outlook. In local banks, ALLIANCE & LEICESTER (-10.63%) took a GBP192m hit and the market was not impressed by the outlook. G4S (-6.25%) also lost ground, despite a positive update, as it announced a 127m new shares placement. SAINSBURY (-2.26%) retreated after a Goldman downgrade and ahead of tomorrow's 1Q results. TUI TRAVEL (-2.03%) took off after saying its 1H loss before tax fell to GBP294m. Added talks were ongoing with Lufthansa regarding a potential merger of GermanWings and TUIfly. ENTERPRISE INNS (-1.44%) posted an 11% fall in 1H PTP and noted tough trading. TRAVIS PERKINS (-3.12%) reported a 6.8% rise in sales in the first 4M of the year. PREMIER FOODS (+2.30%) said trading was in line and group sales in the 17 weeks to 26 April rose 6.3%. In other news, CARPHONE WAREHOUSE (-3.26%) was thought to have missed out on Tiscali after the Italian firm said it has defined a shortlist. VODAFONE (+0.25%) and BSKYB (-0.29%) were thought to be among those who will be given access to Tiscali's books. INFORMA (+1.41%) is being circled by PE equity groups, according to The Times.


The CAC 40 (+0.45%) closed the session in the black. Wall Street was trading in negative territory after Fed Chairman Bernanke said financial companies may need to raise more capital and a disappointing outlook from Wal-Mart. Of local note, CREDIT AGRICOLE (-5.64%) confirmed its board will tomorrow discuss a EUR 5.9bn capital increase in addition to signing off the 1Q accounts. The bank said 1Q net profit should come in at EUR 892m, down 66.4% y/y. SOC GEN (-0.84%) reported 1Q net att. profit of EUR 1.096bn, down 23.4% y/y but beating consensus of EUR 924m. EADS's (-0.13%) Airbus confirmed A380 delays, now seeing fewer deliveries in 2008-09. In auto news, Nissan, RENAULT's (+2.34%) alliance partner, posted 4Q operating profit of JPY211.7bn (EUR 1.31bn), down 5.4% y/y, but beating consensus. Also in the black, CARREFOUR (+2.55%) has announced Robert Halley will step down as chairman to become an honorary president. Bernard Arnault joins the supervisory board. CAPGEMINI (+2.03%) gained on news HP is buying technology outsourcing company Electronic Data Systems for US$12.6bn. SUEZ (+1.07%) and a unit of Spanish bank Santander have reportedly placed a bid to build a hydroelectric plant in the Amazon region, Brazil. Staying with utilities, UBS upgraded VEOLIA (+0.66%) to neutral from sell.


Xetra-Dax (+0.34%) finished the day with minor gains, as Wall Street was trading lower with a disappointing outlook from Wal-Mart weighing on sentiment. Overnight, America's No. 3 mobile phone services provider Sprint Nextel - in which DEUTSCHE TELEKOM (-2.35%) is said to be interested - posted a 1Q loss of US$505m vs US$211m y/y. In local earnings news, CELESIO (-7.32%) reported 1Q net profit of EUR 57.6m on sales of EUR 5.4bn, in line with expectations, but warned that the first half of this year would be considerably weaker than that of last year. CARL ZEISS MEDITEC (+13.26%) tabled 1H net income of EUR 24.5m, up from EUR 19.7m last time. VERSATEL's (-6.91%) 1Q operating earnings shrank to EUR 47.3m, down EUR 6.8m from last time. In other news, METRO's (+0.6%) CEO said the company was under no pressure to sell its Galeria Kaufhof department stores unit, adding that he was not in talks with any potential buyers. Moreover, Permira ruled out selling or delisting HUGO BOSS (+1.54%). Looking ahead to tomorrow, blue-chip companies reporting results are DEUTSCHE POST (+0.05%) and THYSSENKRUPP (-1.96%). The former is expected to report quarterly EBIT of EUR 857m, while the latter's fiscal 2Q PTP is put at EUR 749m. E.ON (+0.35%), another Xetra-Dax-listed company disclosing numbers on Wednesday, is expected to show 1Q adj. EBIT of EUR 3.39bn.


The SLI (+0.91%) closed firmly higher, catching up after yesterday's holiday.

Meanwhile, the rest of Europe closed mixed in Tuesday's session. New York was lower as Fed Chairman Bernanke said that financial markets remain unsettled. Among Swiss stocks, perfomances were mixed. NESTLE (+1.59%) closed higher despite ABN Amro downgrading to hold from buy. ABB (+3.09%) advanced after booking a US$170m contract in Ludvika from Kraftnat and Fingrid to deliver two HVDC converter stations to the power link in Fenno-Skan 2 in the Baltic Sea. It said the project is expected to be completed by the end of 2011. NOBEL BIOCARE (+3.74%) said it will start its share buyback tomorrow of up to CHF750m by 2010. Renova raised its stake to 39% of OERLIKON's (-1.09%) voting rights. Separately, Viktor Vekselberg plans to combine Oerlikon, SULZER (-0.65%) and RIETER (+0.82%), and former ABB CEO Fred Kindle has been asked to head the company, Sonntag reported, citing four unnamed sources. GIVAUDAN (+1.91%) entered a new fragrances deal with Colgate Palmolive. SONOVA's (+2.22%) fiscal FY07/08 profit topped expectations, with net earnings rising 13% to CHF274.1m on sales 12.3% higher y/y at CHF1.2bn. Looking ahead to tomorrow, SCHAFFNER (+1.01%) reports 1H results.


Nordic bourses closed mixed: C20 (+1.22%), S30(+0.35%), HPI (+0.05%) and OSEBX (-0.31%). Wall Street trades lower as stronger April retail sales data are offset by a weak Wal-Mart outlook. On the macro front locally, Swedish April CPI rose 3.4% y/y and 0.5% m/m, in line with forecast. In Copenhagen, MOELLER MAERSK (+5.22%) outperformed ahead of 1Q results on Thursday, a Reuters poll sees EBIT up DKK11.1bn. In earnings, STATOILHYDRO (+1.80%) delivered 1Q EBIT at NOK51.44bn, above forecast. Said results were supported by a record rise in the price of oil and gas, gains from sales of assets and currency, and lower write-down of inventories. Meanwhile, FY07 production costs, adjusted for merger, rose more than forecast to US$35.70/bbl vs US$28.04 in 2006. Higher-than-expected tax rate at 71% resulted in EPS coming in short of ests. Keeps 2008-12 production targets of equity-based output of 1.9m-2.2m boed. Staying in Norway, YARA (+2.78%) said it has entered a j/v with Burrup Holding to build a 350k tonne technical ammonium nitrate (TAN) plant in Australia. ABB (+2.13%) booked a US$170m power link contract in the Baltic Sea. G4S (-2.27%) placed up to 127m new shares, equivalent to c.9.9% of issued capital before the placing. Elsewhere, SWEDISH MATCH (-0.57%) appointed Lars Dahlgren as new CEO from 1 June. GN STORE NORD's (+7.33%) Swiss peer Sanova posted FY07/08 profit above expectations.

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