ADVFN Morning Euro Markets Bulletin - March 7th 2011

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London Market Reports
Sluggish start for Footsie

Market Movers
FTSE 100 5,972.80 -0.29%
techMARK 1,907.49 -0.20%
FTSE 250 11,690.53 -0.28%

London has made a slow start with concerns over the Middle East and North Africa adding to some mixed trading updates.

Light crude rose to a 30-month high above $106 on Monday as civil war rages in Libya while reports that the unrest may have reached Saudi Arabia further added to the oil market's frayed nerves.

Petrofac fell even though the oil fabrications giant reported only a ‘minimal impact’ so far from the unrest, but it adds it continues to monitor the situation closely.

Reports over the weekend that BSkyB's shareholders want a much higher offer from News Corp have lifted the satellite broadcaster, while the LSE is mulling Nasdaq as a takeover target after it concludes its merger with Toroto SE according to another story.

Burberry is going well after Verdict suggested that the top end of the clothing retail market will grow by nearly 30%, to £8.6bn, by 2014.

Stagecoach blames “unusually severe” weather conditions in December for a slowdown at its UK bus business, but its trains remain on track and revenue is up in North America. Like for like revenue grew 1.9% at UK Bus in the 40 weeks to 6 February, down from 2.3% for the six months to 31 October.

Mining giant Xstrata has moved quickly to snap up the outgoing Vodafone chairman Sir John Bond as its new chairman of the board. Sir John will replace Willy Strothotte, who is to retire after the AGM on 4 May.

UK oil and gas titan BG Group has signed a 20-year deal to provide 1.2m tonnes of liquefied natural gas a year to Tokyo Gas, Japan’s largest city gas supplier.

Intertek, the testing and inspections firm, has paid £450m for Moody, a provider of quality and safety services to the global energy industry. The purchase of Haywards Heath-based Moody on a cash-free and debt-free basis will create “significant” benefits and opportunities, including pre-tax cost synergies of about £6m by the third full year of ownership.

Satellite operator Inmarsat has slumped after it warned growth had slowed in the last quarter of 2010 and early 2011 due to lower usage levels.


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UK Event Calendar
INTERIMS
3D Diagnostic Imaging

INTERIM DIVIDEND PAYMENT DATE
Stavert Zigomala

QUARTERLY EX-DIVIDEND DATE
Frontline Ltd.

GMS
ValiRx

FINALS
Access Intelligence, British Polythene Industries, CLS Holdings, Inmarsat, Intertek Group, Management Consulting Group, Michael Page International, Paddy Power, Petrofac Ltd., SDL, Tarsus Group

ANNUAL REPORT
BlackRock World Mining Trust

IMSS
IG Group Holdings

EGMS
Green Dragon Gas Ltd. (DI), Origo Partners

AGMS
Jupiter Second Split Trust Geared Shares, Proventec

FINAL DIVIDEND PAYMENT DATE
Fenner

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
M2 Money Supply (JPN)
Current Account and Trade Balance (JPN)
Sentix Investor Confidence (EU) (9:30)
Consumer Credit (US) (20:00)


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European Market Reports
LVMH swoops for Bulgari

Red figures comfortably outnumber blue ones on traders’ screens as European markets get off to a slow start to the week after conflict in Libya escalated over the week-end.

The CAC 40 in Paris has fallen below 4,000 and is down 22 at 3,998 while the DAX in Frankfurt is off 32 points at 7,146. The Swiss Market index is 43 points lower at 6,487.

French luxury goods firm LVMH is poised to buy Italian jeweller Bulgari after it agreed to buy a controlling stake from the Bulgari family.

The French company has agreed to issue LVMH shares to the Bulgari family to the value of €1.87bn in return for a 50.4% stake in the Italian company, and plans to make a tender offer for the remainder of the Bulgari shares, in a deal that values the entire issued share capital of Bulgari at about €3.7bn.

Pfizer and Sanofi-Aventis received a blow after Japan’s health ministry suspended the use of pædiatric medicines produced by the two drugs giants. The action was taken after four deaths were reported following immunisations.

The suspension was described as a precautionary measure.

As the price of oil continues to shoot up, car makers generally remain out of favour, but Peugeot defies the trend in early trading. Volkswagen, BMW and Daimler feature prominently among the main losers in Frankfurt, however.


CAC 40 - Risers
Alcatel-Lucent (ALU) € 4.01 +3.03%
ST Microelectronics (STM) € 9.38 +0.62%
Peugeot (UG) € 28.35 +0.59%
Total (FP) € 44.10 +0.33%
Natixis SA (KN) € 4.18 +0.10%
Essilor International (EI) € 51.95 +0.02%

CAC 40 - Fallers
LVMH (MC) € 110.30 -1.12%
Pernod Ricard (RI) € 66.04 -1.06%
Sanofi-Aventis (SAN) € 50.57 -1.04%
Unibail-Rodamco (UL) € 146.70 -0.98%
Lafarge (LG) € 43.19 -0.96%
Renault (RNO) € 41.78 -0.90%
ArcelorMittal SA (MT) € 25.93 -0.90%
AXA (CS) € 14.90 -0.73%
Saint Gobain (SGO) € 42.06 -0.73%
Michelin (ML) € 57.23 -0.71%


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US Market Reports
Big loss for the Dow

Wall Street improved near the close but still posted big losses as heavy fighting in Libya weighed on the oil price. Dow Jones shed 88 at 12,169. The tech-laced Nasdaq dropped 14 at 2,784, while the S&P 500 fell 9 at 1,321.

Brent crude rose above $116 a barrel as the conflict in Libya continues. Government forces have been cracking down on protesters in Tripoli and there have been clashes at Ras Lanuf, a major oil terminal.

US payrolls climbed by 192,000 in February, ahead of expectations, while the unemployment rate fell to 8.9% from 9%, but more notice has been taken of data showing average hourly earnings were unchanged in February.

In company news, supermarket giant Wal-Mart said after the close last night that it is increasing its quarterly dividend to 36.5c a share. Bank of America Merrill Lynch downgraded Goldman Sachs and Citigroup. Contact lens maker Cooper jumped after quarterly earnings came in ahead of expectations. Marvell Technology, which makes the processor for Blackberry phones, missed expectations though and the shares are lower.


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Newspaper Round-up
Tesco, BAE Systems, Budget...

Britain’s leading supermarkets have been accused of misleading planning authorities by claiming to create tens of thousands of jobs when actually they employ fewer workers than they did two years ago.

Tesco and J Sainsbury have made extravagant claims about the number of jobs they create in order to convince local authorities to permit new stores. Analysis of their annual reports, however, reveals that the combined net headcount for the two chains has fallen, the Times reports.

Kraft Foods has been subpoenaed by the US Securities and Exchange Commission over accusations of bribery at Cadbury’s operations in India. The world’s second-largest food company, which acquired the British confectioner last year in a controversial £11.9bn deal, said that it had received the subpoena on February 1 as part of an investigation by the SEC under the US Foreign Corrupt Practices Act, which bans the payment of bribes to foreign officials and governments, the Times reports.

The Financial Services Authority was in denial about the scale of the banking crisis right up to the week of the multi-billion-pound bailout of RBS in October, 2008, an investigation by The Telegraph has found.

Britain's bank regulators need to get "tough" to catch failing institutions and it would be wrong to have a system that allowed people to believe no bank could ever fail, according to Bob Diamond, new chief executive of Barclays. Speaking to The Daily Telegraph for his first interview since taking up the role at the beginning of the year, Mr Diamond insisted new capital rules under the Basel III arrangements were fair but that regulators needed to be effective in identifying problems and taking action that did not result in the financial system being destabilised.

George Osborne, the UK chancellor, believes that expected recommendations on restructuring retail and investment banking groups by the Independent Commission on Banking are “going in the right direction”, an aide insisted on Sunday. The commission, chaired by Sir John Vickers, is investigating the merits of splitting up the big UK banks into separate retail and investment banking companies or forcing those operations to be capitalised separately. It appears to favour the latter option, which is fiercely opposed by the big banks, the FT reports.

BAE Systems is braced for the imposition of strict curbs on its business by the US, as it moves closer to resolving a year-long review by the State Department of its guilty plea to a conspiracy charge last year. A debarment by the State Department could prohibit the British parent company from transferring US-origin technology or capabilities to other entities. According to people familiar with the matter, BAE has not officially been alerted that it will be debarred, but it is prepared for such a decision, the FT reports.

David Cameron attacked “the enemies of enterprise” in the Civil Service yesterday, blaming them for blocking private-sector growth. At the Tory Spring conference in Cardiff, the Prime Minister made a moral case for cutting public spending and expanding the private sector, saying that he wanted “real fairness” in Britain. He made clear that he saw some civil servants as an enemy within and would “pull them into his office” if he caught them imposing additional burdens on business, the Times reports.

The Confederation of British Industry (CBI) is calling on the Chancellor of the Exchequer to cut taxes and reduce employment rights in an "all-action Budget" on 23 March. In a letter to George Osborne, the CBI's director-general, John Cridland, says that ministers should "signal a road map for reducing the 50p tax rate", a measure put forward by Labour but retained by the Coalition Government as part of its deficit-reduction programme. The CBI argues that "mobile talent needs a good reason to do business in the UK", the Independent reports.

Britain's booming manufacturing sector is set to ramp up investments this year but the money will flow overseas unless the Government improves the business environment, a leading lobby group will warn today. Despite a slight dip from the previous quarter, both industrial output and orders remain at near-record growth levels, well above the long-term average, according to the quarterly poll by the EEF manufacturers' organisation. Strong exports are driving the gains, with a balance of 24% of respondents reporting rises in the first quarter, and of 28% expecting the trend to continue into the second, the Independent reports.

A surprise surge in grocery spending boosted retail sales last month. Spending was up by 4.3%, despite mounting pessimism among retailers, according to analysis by MasterCard SpendingPulse. Grocery spending was up by 6.6% against last year. Growth in clothing sales was at its weakest in more than a year, despite the figures being inflated by steep price rises. Travel sales fell for the first time since May, and furniture sales growth was at its weakest since July, the Times reports.

Jamie's Italian, the restaurant chain founded and majority-owned by Jamie Oliver, is in the early stages of considering a stock market float which could value the company at approximately £100m. The float would mark the popular television chef's first foray into the public markets, and be a real test of the enduring nature of his 10-year-old brand, the Telegraph reports.