ADVFN Evening Euro Markets Bulletin - October 14th 2010

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London Market Reports
Footsie builds on gains

Market Movers
techMARK 1,780.17 +0.24%
FTSE 100 5,760.24 +0.22%
FTSE 250 10,940.06 +0.35%

London has crept higher following yesterday’s gains, with a stream of updates giving investors plenty to ponder. Starting with the bad news, African Barrick Gold has suspended 40% of the mining department at its Buzwagi mine in Tanzania following a fuel theft it suspects was an inside job. The shares are down 10%.

Also in mining, Rio Tinto edges higher after reporting more of the same for the third quarter with operations running at or close to capacity. “This quarter we achieved record production in iron ore, alumina and coking coal,” said chief executive Tom Albanese.

Newsagent and bookshop WH Smith is in demand after it posted a strong rise in profits and upped its final dividend by a fifth after a record year from its outlets in railway stations and airports. Pre-tax profits in the year to August jumped by 9% from the previous year to £89m, even as revenues slipped to £1.31bn from £1.34bn. A final dividend of 13.3p is proposed, up 18% on the previous year.

Emerging markets asset manager Ashmore, also higher today, grew assets under management (AuM) by 18% in the three months to 30 September, much more than expected.

Cash and carry group Booker posted a sharp rise in interim profits and reports strong turnover so far in the second half. Pre-tax profits in the 24 weeks to September 10 climbed to £36.9m from £29.7m in the same period the previous year on sales that rose 5.5% to £1.7bn.

Elsewhere in retail-related stocks, Mothercare, the baby clothes and children’s toy retailer, put in a better performance during the second quarter, narrowing the decline in like for like sales compared with the first three months. UK like for like (LFL) sales dropped 3.2%, or 1.9% including VAT, in the 13 weeks ended 9 October, slightly less than the 4.1% reported in the 15 weeks to 10 July.

Greeting card retailer Clinton Cards is cautious ahead of Christmas after seeing sales decline in the year to August 1 amid fragile consumer confidence. Sales fell to £337m from £340m the previous year, while adjusted pre-tax profits edged up to £13.3m from £12.9m.

Internet fashion retailer ASOS continues to see sales soar as it consolidates its position in the UK and makes strong inroads abroad. Sales in the three months to September 30 rose by 47% from the same period a year ago to £69.7m. UK sales were up 21% to £43.7m while international sales rose by 128% to £26m.

Pub chain JD Wetherspoon is lower today after announcing some senior departures. The chain famous for 99p pints is losing its finance director and chief operating officer “in due course” after just a couple of years on the board. Former Tesco man Keith Down, finance boss and company secretary since 2008, and Paul Harbottle, at Wetherspoon since 2003 and now chief operating officer, will leave.


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FTSE 100 - Risers
Vodafone Group (VOD) 166.90p +1.83%
Xstrata (XTA) 1,321.50p +1.65%
Kazakhmys (KAZ) 1,424.00p +1.35%
Fresnillo (FRES) 1,298.00p +1.25%
Eurasian Natural Resources Corp. (ENRC) 941.00p +1.18%
Lonmin (LMI) 1,850.00p +1.15%
Antofagasta (ANTO) 1,316.00p +1.15%
Legal & General Group (LGEN) 107.20p +0.94%
Standard Chartered (STAN) 1,892.00p +0.85%
Aviva (AV.) 402.10p +0.78%

FTSE 100 - Fallers
African Barrick Gold (ABG) 572.50p -8.18%
Compass Group (CPG) 523.00p -1.51%
Reed Elsevier (REL) 556.00p -1.24%
Hammerson (HMSO) 419.40p -1.04%
Imperial Tobacco Group (IMT) 1,930.00p -0.92%
Pearson (PSON) 1,000.00p -0.89%
Diageo (DGE) 1,136.00p -0.61%
AstraZeneca (AZN) 3,319.50p -0.61%
Intertek Group (ITRK) 1,862.00p -0.53%
Marks & Spencer Group (MKS) 416.80p -0.50%

FTSE 250 - Risers
WH Smith (SMWH) 475.10p +4.42%
Moneysupermarket.com Group (MONY) 81.95p +3.67%
Keller Group (KLR) 613.00p +3.03%
Hochschild Mining (HOC) 500.50p +2.60%
Brown (N.) Group (BWNG) 278.80p +2.50%
Ashmore Group (ASHM) 370.60p +2.46%
BlueBay Asset Management (BBAY) 372.80p +2.31%
SIG (SHI) 109.90p +2.23%
Morgan Crucible Co (MGCR) 238.00p +2.19%
Punch Taverns (PUB) 78.55p +2.15%

FTSE 250 - Fallers
Dunelm Group (DNLM) 445.50p -3.15%
JD Wetherspoon (JDW) 444.10p -2.33%
Daejan Holdings (DJAN) 2,700.00p -1.78%
Halma (HLMA) 337.30p -1.66%
Derwent London (DLN) 1,563.00p -1.45%
Supergroup (SGP) 1,113.00p -1.42%
Mothercare (MTC) 510.00p -1.26%
Avis Europe (AVE) 206.00p -1.20%
BTG (BGC) 227.40p -1.13%
Electra Private Equity (ELTA) 1,491.00p -1.01%


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UK Event Calendar for today
INTERIMS
Booker Group

INTERIM DIVIDEND PAYMENT DATE
Davis Service Group, Hikma Pharmaceuticals, Macfarlane Group, Molins, United Business Media, Zotefoams

QUARTERLY PAYMENT DATE
Yamana Gold Inc

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Goods Price Index (JPN)
Machine Tool Orders (JPN)
ECB Report (EU) (09:00)
Balance of Trade (US) (13:30)
Continuing Claims (US) (13:30)
Initial Jobless Claims (US) (13:30)
Producer Price Index (US) (13:30)
Crude Oil Inventories (US) (15:30)

Q3
Rio Tinto

GMS
Coal of Africa Limited, HydroDec Group

FINALS
Clinton Cards, WH Smith

ANNUAL REPORT
Clinton Cards

IMSS
Ashmore Group, Eaga, Renishaw

AGMS
Coal of Africa Limited, Diageo, Eaga, Electric & General Inv Trust, Encore Oil, Mattioli Woods, Monitise, Renishaw

TRADING ANNOUNCEMENTS
Mothercare, Rio Tinto

UK ECONOMIC ANNOUNCEMENTS
Nationwide Consumer Confidence (01:00)


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US Market Reports
Major Averages Jump To New Five-Month Closing Highs

Stocks turned in a strong performance during trading on Wednesday, as traders reacted positively to a batch up upbeat earnings news. The major averages all ended the day firmly in positive territory, reaching new five-month closing highs.

The strength in the markets came following the release of better than expected quarterly results from big-name companies such as Intel (INTC), JP Morgan (JPM), and CSX Corp. (CSX). The results generated optimism about the earnings season, which is just starting to pick up steam.

Railroad stocks turned in some of the market's best performances following the positive results from CSX, driving the Dow Jones Railroads Index up by 4.1 percent. With the gain, the index ended the session at an all-time closing high.

Most of the other major sectors also moved to the upside on the day, with gold, electronic storage, and oil service stocks posting standout gains. On the other hand, banking stocks came under pressure in afternoon trading, helping to pulling the major averages down off their best levels of the day.

While the major averages slipped from their highs going into the close, they still managed to post strong gains for the session.

The Dow rose 75.68 points or 0.7 percent to 11,096.08, the Nasdaq jumped 23.31 points or 1 percent to 2,441.23 and the S&P 500 advanced 8.33 points or 0.7 percent to 1,178.10.

European Market Reports

etter than expected earnings have given European shares a boost in early dealings. Swiss seed and pesticide group Syngenta has seen its share price grow after sales beat analysts’ estimates.

German fashion house Hugo Boss is in demand after increasing its sales and profits forecasts.

Elsewhere in high fashion, French luxury goods group LVMH Moet Hennessy Louis Vuitton posted a 24% rise in third quarter sales – helped by rich Asians splashing out on handbags and the like.

The Dax 30 in Frankfurt is up 36 points at 6,471, the CAC 40 in Paris is 9 better at 3,837 and the Swiss market is up 20 at 6,475.

The European Central Bank has released its monthly bulletin. Recent economic data are consistent with the expectation that the recovery should proceed at a moderate pace in the second half of this year, it says.


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Thursday newspaper round-up
Britain’s biggest banks have admitted for the first time that there was a problem with lending to small businesses and that they should offer greater support. In a wide-ranging report published last night, the banks – Barclays, Royal Bank of Scotland, Lloyds Banking Group, HSBC, Santander and Standard Chartered – acknowledged that there was a “squeeze” on the supply side of credit to small companies, the Times reports.

Bailed-out lender Lloyds Banking Group is to axe a further 4,500 jobs in its IT division as it continues with a huge restructuring programme following its takeover of HBOS last year. The latest job cuts will bring the total number of roles lost at the bank since its merger with HBOS in January 2009 to "about 22,000", the company said, according to the Telegraph.

Britain’s largest airlines have written to the Government to complain that it is giving subsidies worth potentially billions of dollars to their international competitors. Britain’s Export Credit Guarantee Department works with other European countries to support foreign airlines when they buy Airbus aircraft. However, British airlines are not eligible for the same assistance. Steve Ridgway, chief executive of Virgin Atlantic, said yesterday that this meant Britain was effectively subsidising airline jobs on other continents, writes the Times.

The European Commission is pressing EU governments not to issue any new deepwater oil and gas exploration licences until tougher safety standards are in place. Günther Oettinger, the European energy commissioner, said today that a moratorium would provide breathing space in which to examine the changes that needed to be made to existing legislation to prevent any repetition of the Deepwater Horizon disaster in European waters, according to the Times.

Jamie Dimon, chief executive of JPMorgan Chase, has robustly defended how the bank evicts homeowners, as the row over repossessions in America escalates in the run-up to key elections. The country's second-biggest bank has suspended repossessions in 23 states amid allegations that homes have been taken back without the necessary paperwork being properly checked, reports the Telegraph.

F&C, the UK fund manager, plans to vote against the re-election of the chairman of News Corp's audit committee in protest at political donations the media company has made in the US. "We are concerned to see the company deploy shareholder funds for activities that are best left to those individuals whose views they reflect and are not obviously a matter for the company," said Karina Litvack, head of governance and sustainable development at F&C, according to the Telegraph.

Guy Hands, the private equity financier, is seeking a staggering £7bn in damages from Citigroup in a showdown with the American bank that moves to a New York court next week. Hands's investment group, Terra Firma, is suing Citigroup over its disputed take- over of EMI for £4.2bn on the eve of the credit crunch. He is demanding compensation for EMI's accumulated losses of £1.75bn and a punitive sum worth three times that figure, which would give him £7bn, the Guardian reports.

The amount of money people can save into a tax-free ISA looks set to rise by £470 next year, it emerged yesterday, according to the Independent.