ADVFN Morning Euro Markets Bulletin - May 24th 2011

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London Market Reports

FTSE 100 Euronext Dax perf CAC 40

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Shares win back some losses

Market Movers
techMARK 1,946.64 +0.48%
FTSE 100 5,863.35 +0.47%
FTSE 250 11,875.41 +0.68%
The top share index has made a modest recovery following yesterday’s slide, with mining stocks setting the pace.

Higher commodity prices are boosting the likes of South American copper minerAntofagasta and South African platinum miner Lonmin.

The banking sector is under pressure though, with Moody’s considering downgradingLloyds Banking, Royal Bank of Scotland and 12 others. The ratings agency is worried that credit risk may increase after the withdrawal of government support.

In company news, high street stalwart Marks & Spencer eases even after it said it was winning market share in both clothes and food sales as it posted pre-tax profits in line with expectations for the year to 31 March. Underlying pre-tax profits totalled £714.3m, up from £694.6m the previous year. Revenue rose to £9.7bn from £9.5bn.

The UK economy is recovering, albeit slowly, if the experience of self-storage companyBig Yellow, another faller today, is anything to go by, but the company is still waiting for the pace of recovery to change gear. Revenue in the 12 months to 31 March rose 7% to £61.9m from £58.0m the prior year. Adjusted profit before tax surged 22% to £20.2m from £16.5m a year earlier.

Cable & Wireless Worldwide is posting laege gains after it said it saw underlying profit before tax jump 23% to £143m in the year to 31 March from £116m the year before. The board said it intends to hold the annual dividend at 4.5p until it is covered by free cash flow.

The buy-to-let mortgage lender Paragon is in demand after posting a sharp rise in profits, helped by an upturn in tenant demand in the private rented sector.

Plastics group Victrex, which serves transport, electronics and other markets, hailed a recovery in all its main areas as it posted a rise in revenues and profits.

Shares in EMED Mining soared after it said it received formal approval from the Andalucian government to restart its Rio Tinto copper mine.

FTSE 100 - Risers
Antofagasta (ANTO) 1,197.00p +3.19%
Kazakhmys (KAZ) 1,237.00p +2.49%
Eurasian Natural Resources Corp. (ENRC) 832.50p +2.08%
Fresnillo (FRES) 1,329.00p +2.07%
Rio Tinto (RIO) 4,108.00p +1.86%
Xstrata (XTA) 1,382.50p +1.84%
BHP Billiton (BLT) 2,344.50p +1.76%
Anglo American (AAL) 2,876.00p +1.61%
Resolution Ltd. (RSL) 309.00p +1.61%
Vedanta Resources (VED) 2,087.00p +1.56%

FTSE 100 - Fallers
Marks & Spencer Group (MKS) 392.00p -1.26%
Lloyds Banking Group (LLOY) 50.35p -1.02%
John Wood Group (WG.) 620.00p -0.80%
Barclays (BARC) 266.15p -0.78%
Associated British Foods (ABF) 1,073.00p -0.46%
Pearson (PSON) 1,133.00p -0.44%
International Consolidated Airlines Group SA (IAG) 234.00p -0.43%
Shire Plc (SHP) 1,874.00p -0.43%
Aviva (AV.) 421.70p -0.38%
Amec (AMEC) 1,142.00p -0.35%

FTSE 250 - Risers
Cable & Wireless Worldwide (CW.) 52.30p +5.32%
Paragon Group Of Companies (PAG) 197.10p +4.73%
Hochschild Mining (HOC) 529.00p +4.34%
Pace (PIC) 101.90p +3.77%
Victrex (VCT) 1,442.00p +2.93%
Daejan Holdings (DJAN) 2,800.00p +2.68%
Centamin Egypt Ltd. (CEY) 124.60p +2.64%
Mitie Group (MTO) 226.00p +2.54%
Talvivaara Mining Company (TALV) 477.60p +2.51%
Cookson Group (CKSN) 674.00p +2.43%

FTSE 250 - Fallers
FirstGroup (FGP) 342.20p -2.00%
Big Yellow Group (BYG) 339.80p -1.34%
Dixons Retail (DXNS) 19.65p -1.31%
Unite Group (UTG) 210.10p -1.13%
Inchcape (INCH) 376.90p -0.79%
Home Retail Group (HOME) 205.80p -0.68%
Informa (INF) 423.50p -0.66%
Hikma Pharmaceuticals (HIK) 846.00p -0.65%
Hiscox Ltd. (HSX) 417.50p -0.57%
Grainger (GRI) 126.00p -0.55%








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UK Event Calendar
INTERIMS
Datong, Greencore Group, Holidaybreak, Paragon Group Of Companies, Renew Holdings, Victrex

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
GDP (GER) (07:00)
Domestic Demand (GER) (7:00)
Government Spending (GER) (7:00)
Exports (GER) (7:00)
Imports (GER) (7:00)
Production Outlook Indicator (FRA) (7:45)
Business Confidence Indicator (FRA) (7:45)
IFO Business Climate (GER) (09:00)
IFO Current Assessment (GER) (09:00)
IFO Expectations (GER) (09:00)
Industrial New Orders (EU) (10:00)
New Homes Sales (US) (15:00)
Richmond Fed Manufacturing Index (US) (15:00)

Q4
Big Yellow Group

GMS
EMIS Group

FINALS
Big Yellow Group, Cable & Wireless Worldwide, Chamberlin, De La Rue, Great Portland Estates, Homeserve, KCOM Group, Marks & Spencer, Pennon Group

AGMS
ANT, Better Capital Ltd., Corero, EMIS Group, Essenden, Fairpoint Group, Gulfsands Petroleum, Japan Residential Investment Co Ltd., Metalrax Group, Solomon Gold, SQS Software Quality Systems AG, Standard Life Investments Property Income Trust Ltd., Tanfield Group, Third Point Offshore Investors Ltd. EUR Shares, Third Point Offshore Investors Ltd. GBP Shares, Third Point Offshore Investors Ltd. USD Shares, Zenergy Power

UK ECONOMIC ANNOUNCEMENTS
Public Sector Finances (09:30)
CBI Reported Sales (11:00)

FINAL DIVIDEND PAYMENT DATE
Brady, Holders Technology, Jupiter Fund Management , Zotefoams

Q1
Alpha Bank GDR (Reg S) USD, Espirito Santo Financial Group SA, Frutarom Indstries Ltd.GDR (Reg S), OJSC Cherkizovo Group GDR (Reg S)


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European Market Reports
Tentative recovery

Bargain hunters have emerged after yesterday's big shake-out on global markets, but Europe's leading markets claw back only a fraction of yesterday's heavy losses.

In Paris the CAC 40 is up 11 at 3,918 while in Frankfurt the DAX 40 is 17 points firmer at 7,139. In Italy, the MIB index is 61 points to the good at 20,593.

Ratings agency Moody's is looking at the UK banking scene and contemplating downgrading some of the major players, as it believes that the UK's tougher stance on bail-outs will increase credit risk.

The part-nationalised lenders Lloyds and Royal Bank of Scotland fall back on the news, but the rest of the sector has largely shrugged off the Moody's announcement.

Higher metal prices are prompting demand for miners.

CAC 40 - Risers
Pernod Ricard (RI) € 68.97 +2.03%
ArcelorMittal SA (MT) € 22.97 +1.08%
Accor (AC) € 30.74 +0.89%
Vinci (DG) € 43.24 +0.80%
Air Liquide (AI) € 93.77 +0.72%
Vivendi (VIV) € 19.02 +0.69%
Alstom (ALO) € 42.08 +0.68%
PPR (PP) € 115.80 +0.61%
LVMH (MC) € 116.75 +0.60%
Total (FP) € 39.72 +0.60%

CAC 40 - Fallers
Suez Environnement Company (SEV) € 14.46 -4.21%
Danone (BN) € 49.38 -1.77%
Renault (RNO) € 38.00 -0.68%
Essilor International (EI) € 54.81 -0.35%
Peugeot (UG) € 28.68 -0.26%
Sanofi (SAN) € 53.50 -0.09%
Societe Generale (GLE) € 41.28 -0.08%
Cap Gemini (CAP) € 39.08 -0.05%
Publicis Groupe Sa (PUB) € 38.42 -0.04%






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US Market Reports

Dow Jones NASDAQ NYSE AMEX

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Global concerns spark sell-off

US benchmarks finished in the red as the eurozone sovereign debt crisis rolled on, this time with Italy as the focus.

The Dow finished 131 lower at 12,381, the Nasdaq dropped 44 to 2,759, while the S&P 500 fell 16 to 1,317.

The spotlight turned to Italy as ratings agency Standard & Poors (S&P) changed its stance on the Mediterranean country to “negative” from “stable.” Among the factors that worry S&P are the fragility of prime minister Silvio Berlusconi’s ruling coalition.

While S&P has kept its A+ and A-1+ ratings on the nation's long-term and short-term sovereign credit, it sees a 33% probability that these could be revised downwards over the next two years. As a result, the yield on an Italian 10-year bond rose by four basis points to 4.81%.

Despite the attention on Italy, the two countries that have already had to accept bailouts were taking most of the flak. Greece’s 10-year bond soared by 48 basis points to 17.05% and Ireland’s 10-year yield was 32 basis points higher at 10.86%.

Spain also added to the downwards pressure on stocks on electoral concerns. On Sunday, the ruling Socialist party suffered losses to the conservative Popular Party in regional elections, fueling concerns that political volatility could hinder the nation's ability to scale back its deficit.

The situation helped strengthen the greenback to a two-month high against the euro, dampening demand for commodities, with the price of oil taking a hit.

Meanwhile, tech stocks were the notable fallers on Monday. Foxconn, the East-Asian technology components firm which provides parts for the iPad, reported an explosion at a manufacturing plant which killed three people and forced a facility shutdown. While this isn't expected to have much effect on Apple's production, shares closed 0.2% lower.

Google, Hewlett-Packard, Intuit, Oracle, Red Hat, Yahoo and Oracle also finished under.

LinkedIn finished lower following its successful initial public offering last week, on the back of speculation that this could be the start of another tech bubble.

Campbell Soup was out of flavour after US sales fell 5% in the nine months to end 1 May.

Popular doughnut chain Krispy Kreme however finished higher after its first quarter net profit more than doubled to $9.2m on revenue of $104.6m, which beat expectations of $96.8m.

S&P 500 - Risers

CF Industries Holdings Inc. (CF) $147.75 +6.25%
O'Reilly Automotive Inc. (ORLY) $59.02 +1.95%
Sprint Nxtel Corp. (S) $5.57 +1.83%

S&P 500 - Fallers
Compuware Corp. (CPWR) $10.44 -3.96%
Textron Inc. (TXT) $22.09 -3.87%
International Paper Co. (IP) $30.10 -3.86%

Dow Jones I.A - Risers
McDonald's Corp. (MCD) $82.50 +0.21%

Dow Jones I.A - Fallers
Caterpillar Inc. (CAT) $101.89 -2.34%
E.I. du Pont de Nemours and Co. (DD) $51.60 -2.16%
Alcoa Inc. (AA) $15.98 -1.72%

Nasdaq 100 - Risers
O'Reilly Automotive Inc. (ORLY) $59.02 +1.95%
Staples Inc. (SPLS) $16.65 +1.71%
Vertex Pharmaceuticals Inc. (VRTX) $55.80 +1.45%

Nasdaq 100 - Fallers
Foster Wheeler AG (FWLT) $31.91 -4.58%
Joy Global Inc. (JOYG) $86.92 -3.79%
Intuit Inc. (INTU) $52.94 -3.72%


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Newspaper Round-up
Eurozone, Sony, IMF

Fears that the debt crisis is spreading across the eurozonehammered financial markets around the world yesterday. A wipeout for Spain’s Socialists in regional elections over the weekend, coupled with fears of a political logjam in Italy, undermined investor confidence in governments’ efforts to steer a path through the sovereign debt maelstrom, reports the Times.

The electronics giant Sony is set to slump to full-year losses of ¥269bn (£2bn), its second worst performance ever, after a tax charge forced the group to slash its forecasts. The losses will heap further pressure on its embattled chief executive Sir Howard Stringer in a year when the group has suffered from the devastating earthquake in Japan and a cyber attack on its network, says the Independent.

Mexico has proposed its central bank chief as the next head of the International Monetary Fund, as the nominating period for a job popularly known as "the world's banker" officially started. Agustin Carstens, who has run Mexico's central bank since the start of last year and was the country's finance minister before that, is the first candidate to be officially nominated, reports the Telegraph.

Sergei Shmatko, Russia's Energy Minister, does not expect BP and Rosneft to revive their strategic alliance after it was blocked by BP's existing Russian partners. However, he said the two companies were continuing discussions. "In its current form, the deal has become a burden," Mr Shmatko said. "I don't believe there's any chance of reincarnation of the deal in its current form," he said, according to the Telegraph.

TalkTalk has been “dishonest, misleading or deceptive” in hoodwinking customers into signing up to new telephone packages, Ofcom ruled yesterday. The regulator said that the company, which has been under fire in the past for poor customer services, had contravened strict mis-selling rules designed to protect consumers by “providing misleading information that is likely to affect a customer’s purchasing decision,” the Times reports.

A Russian search engine is set to embark on what could be the biggest float by an online firm since Google raised $1.67bn (£1bn) back in 2004. Yandex, which was used by 38m unique users in March, plans to sell its shares at between $24 and $25 apiece when it makes its debut in New York today, according to the Independent.

Irene Rosenfeld, chief executive of Kraft Foods, has defended her company’s handling of the £11.7bn acquisition of British chocolate brand Cadbury last year amid fresh criticism of the deal from UK politicians. A British parliamentary committee issued a report on Monday highlighting “significant concerns” about the Cadbury takeover and sharply criticised the refusal of Ms Rosenfeld to appear before its recent hearings into the deal, the Financial Times reports.

Supermarket giant Tesco is ordering councils across Britain to remove recycling bins from its car parks so it can install its own money-making collection services - potentially netting £25m. Furious council chiefs have accused the retailer of being 'greedy' after it brought in a private contractor to replace council collection bins at 500 stores, the Daily Mail reports.

Britain's major banks yesterday sparked anger from business groups as well as anti-poverty campaigners after they failed to meet lending targets set by the government in return for ministers shelving extra taxes on executive bonuses. According to industry figures, bank lending to small and medium-sized businesses (SMEs) fell more than £2bn short of targets set by the Treasury as part of the Project Merlin deal signed in February, the Guardian reports.