European Indexes Move Lower

A roundup of Thursday's action on major European stock exchanges


The FTSE 100 closed in the red, weighed down by energy and banking stocks, but firm mining stocks limited the downside. Wall Street was trading slightly higher on M&A news and positive jobs data. Meanwhile, crude prices fell to US$131.95/bbl, after hitting a new record high. ING raised its forecasts for oil prices and increased target prices for RDS (-1.94%), BP (-0.50%) and BG (-3.37%). In other news, BRITISH AIRWAYS (+4.69%) flew to the top of the blue-chip index after the BALPA withdrew court action. the LSE (-4.60%) plunged despite FY figures beating consensus, amid persistent concerns over new competition and pricing pressures. TATE & LYLE (-2.27%) soured despite FY numbers ahead of consensus as it warned the sugar market is likely to remain very difficult and challenging in 1H. On the upside, CADBURY (+3.42%) outperformed on renewed bid speculation. CABLE & WIRELESS (+2.69%) reported a 57% rise in FY PTP in line with estimates. In the broader market, bleak news for DAILY MAIL (-1.48%) as the publisher printed an uncertain outlook. MOTHERCARE (-0.51%) delivered a 35.8% rise in FY sales. DE LA RUE (+0.39%) said it was in talks regarding the possible sale of Cash Systems. The group will return GBP160m to shareholders, with a further return once the sale is complete.


The CAC 40 (+0.02%) closed flat, well off intra-day lows, with Wall Street staging a modest rebound from yesterday's losses. WTI has been easing from record highs seen earlier in the session; having earlier passed US$135.00/bbl, it now trades at US$132.35/bbl. Back home, AIR FRANCE-KLM (-10.24%) tumbled after reporting FY core earnings of EUR 1.405bn, up 13.3% y/y, though shy of consensus. Net income of EUR 748m fell 16% y/y. Adding to the gloom, American Airlines plans to cut thousand of jobs, raise charges and slash capacity. Elsewhere, UBS downgraded PPR (-2.16%) to neutral from buy. DANONE (-0.42%) is planning an 'honourable' exit from its j/v with Chinese partner Wahaha following a long and sometimes rancorous legal battle, Les Echos reported. Among gainers, EDF (+2.49%) remained a safe haven. PERNOD RICARD (-0.07%) saw a target cut from Kepler, but the broker reiterated its buy stance. JP Morgan reiterates its overweight stance on SOCGEN (+2.28%). UNIBAIL RODAMCO (unch) has completed the EUR 607m acquisition of the 140,400 square metre 'Shopping City' in Vienna, Austria. In the wider market, ATOS's (+2.04%) AGM was adjourned amid a dispute over voting rights, Reuters reported.


Xetra-Dax (+0.47%) turned positive in late trade, mirroring gains in the US after data showed fewer jobless claims in the US than expected. Also, oil retreated slightly to US$132.25 a barrel. Of local note, COMMERZBANK (+2.4%) and ALLIANZ (+0.93%) are making a EUR 10bn offer for POSTBANK (+1.24%) according to local press reports. LUFTHANSA (-1.8%) said it is interested in Austrian Airlines, but hasn't been approached by the carrier nor has it yet issued an offer. Meanwhile, Air France-KLM's core full-year profit missed expectations, and Finnair issued a profit warning. In other news: the German government has agreed to a revision of the so-called VW (-0.98%) law, Reuters reported a source as saying. Lower Saxony is to keep its blocking minority on important decisions, however. Staying with autos, Auto Motor und Sport reported that DAIMLER (-0.86%) will buy Chrysler's design centre in California. Key for SUEDZUCKER (-0.86%): UK peer Tate & Lyle voiced caution that the sugar market is likely to remain very difficult and challenging in 1H. On the broker front, Merrill Lynch downgraded MLP (-0.09%) to sell and upgraded HANOVER RE (+1.21%) to buy, while Goldman Sachs raised its price objective on GAGFAH (+1.19%) to EUR 13.70, reiterating buy.


Milan ended Thursday's session comfortably higher as Wall Street was trading in the black lifted by lower-than-expected initial claims. Back home, Silvio Berlusconi held his first cabinet meeting yesterday in Naples. Berlusconi announced that the waste-to-energy plant at Acerra will restart immediately. A spokesman for IMPREGILO (+2.06%) confirmed that the Acerra WTE plant, owned by the group, is 95% complete. On that note, A2A (+2.98%) climbed as it is likely to be awarded the waste management contract in the Campania region. The Italian government will convert ALITALIA's (unch) US$473m emergency loan into an asset. The Italian parliament could propose a bill to allow MEDIASET's (+0.17%) Rete 4 to keep analogue frequencies. The broadcaster also acquired a 25% stake in Tunisian satellite channel, Nessma TV. In further M&A news, IT HOLDING (+5.32%) said that it has not received an offer. Earlier in the day, website Women's Wear Daily wrote that Clessidra was planning to buy a majority stake in the holding and delist it. In other news, TELECOM ITALIA (+4.6%) jumped as the Italian regulator said it will cut mobile termination rates by more than 30% over the next three years. The cut is better than the telco expected. On the broker front, ING lifted ENI's (+0.22%) target to EUR 33.60. Keeps buy rating.


The Ibex recouped earlier losses to end the session flat. A lift was provided by stronger trading on Wall Street as weekly jobless claims came in below expectations, while WTI retreated off recent highs, trading at US$132.50/bbl at the European close. In Spain, energy infrastructure plays and stocks with exposure to renewables made gains: ACCIONA (+2.77%), IBERDROLA RENOVABLES (+2.45%), ENAGAS (+3.31%). IBERIA (-4.04%) was the weakest percentage performer amid negative news elsewhere in the sector. SANTANDER (-1.09%) is on the look-out for an acquisition opportunity in the US, but is not in any rush, according to Negocio. Amancio Ortega and three other groups are interested in COLONIAL's (unch) 84%-owned French unit SFL, according to La Gaceta. Meanwhile, Colonial is to undertake a capital increase starting from tomorrow, offering one new share for every 15 shares currently held. AVANZIT (+3.27%) confirmed that its unit Navento is in talks with TELEFONICA (+0.87%) regarding a deal on GPS services in LatAm. In broker action, ING downgraded IBERDROLA (-0.21%) to hold.

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