European Stocks Finish Mostly Higher

A roundup of Wednesday's action on major European exchanges


The FTSE 100 ended a choppy midweek session flat. Meanwhile, Wall Street was higher on the back of a lower-than-expected US CPI for April. In London, caution prevailed after the BOE warned inflation could spike above 4% this year. On the trading floor, miners rallied on speculation of Chinese stake-building in BHP BILLITON (+4.85%) and a positive update from ENRC (+7.19%). On the downside, ALLIANCE & LEICESTER (-2.83%) extended yesterday's losses on fears of further write-downs. More pain for financials as BRADFORD & BINGLEY (-9.29%) unveiled a GBP300m rights issue, at a 48% discount, and said the next dividend will be paid in shares. ASTRAZENECA (+1.87%) gained after the FDA approved the use of Seroquel for maintenance treatment of manic depression. SAINSBURY (-3.91%) reported in-line FY profits but shares fell on outlook. FIRST GROUP (-6.26%) plunged on news it will place up to 43.7m new shares. TESCO (-1.72%) buys 36 stores from South Korea's E-Land for GBP958m. COMPASS (+4.6%) posted solid interim results and said it will buy back GBP400m worth of shares. AMEC (-1.26%) said trading so far is slightly better than expected. BARRATT (-3.4%) reported a relatively encouraging start to the new calendar year but said conditions have been worsening significantly since March. LOGICA (+3.98%) announced a 3% rise in FY revenues. JOHNSTON PRESS (-15.1%) plummeted on a GBP212m rights issue.


The CAC 40 (+1.13%) closed the session firmly higher while Wall Street trades in positive territory following a lower-than-expected CPI reading. Back home, a flurry of earnings reports made the waves. BNP PARIBAS (+4.86%) posted a 21% slide in 1Q net profit to EUR 1.981bn - not as bad as generally feared. The bank reiterated it is not planning a move for SOCGEN (+0.59%). DEXIA's (-1.01%) 1Q core earnings topped expectations, coming in at EUR 769m, up from EUR 88m for the same period a year ago. Also among financials, ING downgraded CREDIT AGRICOLE (-0.31%) to hold from buy. Elsewhere, EADS's (+5.85%) 1Q core earnings beat expectations - coming in at EUR 769m, up from EUR 88m for the same period a year ago. ARCELOR MITTAL (+4.13%) reported broadly in-line 1Q numbers, with EBITDA at US$5.0bn and net profit at US$2.4bn. VINCI (+2.81%) posted 1Q revenues of EUR 7.2bn, up 7.5% y/y on a comparable basis (up 17.2% y/y reported), and above consensus of EUR 7.02bn. CARREFOUR (+1.02%) unveiled 1Q08 sales of EUR 23.375bn, up 10.5% ex currency (+6.4% LFL), above consensus. Confirmed FY objectives. In the wider market, THALES (+1.42%) tabled 1Q sales up 5.3% to EUR 2.31bn. Confirmed FY targets. ARKEMA (+9.44%) announced 1Q net profit of EUR 72m, up 64%. CGG VERITAS (-2.87%) reported 1Q group revenue of EUR 585m; op income EUR 123m, -14%. INFOGRAMES (-3.15%) unveiled FY sales of EUR 290.70m, down 4.8%.


Xetra-Dax (+0.33%) finished the day with minor gains, as US markets traded firmly in the black amid mild inflation data. It was a busy day for earnings releases. E.ON (+0.52%) reported 1Q adjusted EBIT of EUR 3.3bn, missing estimates, but confirmed its 2008 guidance. DEUTSCHE POST's (+2.26%) 1Q core earnings came in shy of expectations, with EBIT slipping 15% y/y to EUR 851m. It also reiterated previously given guidance. THYSSENKRUPP (+1.79%) posted 2Q PTP of EUR 742m, excluding EUR 42m in one-off costs. This was up from EUR 572m a year ago, but still a touch below expectations. Citing a number of problems, it delayed the start of a new mill in Brazil. K+S (+7.6%) saw its 1Q EBIT come in at EUR 226.3m, better than expected. Q-CELLS' (+8.74%) 1Q core earnings also topped expectations, with EBIT coming in at EUR 58.9m. Posting 1Q net profit of EUR 6.9m and confirming its outlook for 2008, SOLON (+1.64%) said it currently plans no capital injection. STADA's (+3.94) quarterly numbers were lower than expected, but analysts pointed to positive momentum. LANXESS (+9.06%) disclosed a 13% rise in 1Q net profit to EUR 103m. AAREAL (-4.98%) tabled a lower-than-expected 1Q net profit of EUR 13m. In M&A news, the FTD reported that INFINEON (+0.15%) was talking with KKR about a merger with chipmaker NXP. MEDIGENE (+11.

85%) was higher on renewed rumours of Pfizer hovering.


Milan ended Wednesday's session firmly higher as Wall Street was trading in the black lifted by a lower-than-expected CPI reading. Back home, note that the 1Q earnings season kicked into high gear today. ALITALIA's pretax loss increased to EUR 214.8m in 1Q08 from EUR 152.3m in 1Q07 due to a decline in revenues and an increase in fuel costs. MEDIASET's (-1.53%) 1Q net profit fell 2.8% to EUR 121m compared to the same time last year, due to the drop on charges linked to its purchase of Endemol and Medusa in 2H07. ENEL (+1.42%) disclosed 1Q core profit of EUR 3.445bn, up 7.7%. BP MILANO's (-0.88%) 1Q net profit fell 45% to EUR 62.1m on lower investment banking revenue. DUCATI (+0.06%) posted 1Q net profit of EUR 14.9m and revenues of EUR 140.8m, up 47.6%. BENETTON (+2.36%) disclosed a 8.6% increase in 1Q net profit to EUR 29m while EBITDA reached EUR 65m. Confirms targets for FY08. CAMPARI (+4.71%) disclosed 1Q revenues of EUR 190.9m, down 2.9% while organic sales growth increased 1.3%. MONDADORI's (-1.21%) 1Q revenues fell 1.7% to EUR 460.3m. A2A (+0.98%) released 1Q EBITDA of EUR 317m, down 0.3% and net profit of EUR 143m, down 2.1%. In other news, MARAZZI's (+12.7%) major shareholder Filippo Marazzi aims to de-list the group by launching an offer at EUR 7.15/sh to purchase the shares he does not already own.


The SLI (+0.30%) closed in positive territory, supported by gains on Wall Street where lower-than-expected CPI for April eased some inflation concerns. CLARIANT (+4.38%) was top gainer after CEO Jan Secher told Handelszeitung that the group plans more price increases to grow profits. Also among today's risers was ROCHE (+1.22%) as Dresdner upgraded the stock to buy from add. The broker also upgraded the EU large cap Pharma sector to overweight from neutral as it thinks emerging markets support future growth for long-term investors. It kept a buy on NOVARTIS (-0.47%), but lowered the target to CHF60 from CHF65. Separately, there was market speculation that NOVARTIS might potentially up its stake in Intercell, although a spokesperson for the Swiss firm said there are no plans to move up from the 16% stake at the moment. On the reporting front, SCHAFFNER's (-4.4%) 1H EBIT missed consensus, but the group said it aims to achieve organic sales growth at the upper end of the targeted 6-8% range in FY2007/08. Tomorrow, ZURICH FINANCIAL (+0.4%) is set to reveal its 1Q report card, and is expected to post net profit of US$1.3bn, down 4% y/y. In other news, ASCOM (+12.68%) is selling its traffic unit to Germany's Annax. Helvea upgraded the stock to buy from neutral. Broker expects Toll France/HK to be the next non-core unit to go.

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