ADVFN Morning Euro Markets Bulletin - Nov. 29th 2011

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London open: Miners and banks prove a drag

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Market Movers

techMARK 1,780.40 -0.10%
FTSE 100 5,293.43 -0.36%
FTSE 250 9,908.14 0.00%
Investors are generally holding their fire ahead of this afternoon's Autumn statement from the Chancellor of the Exchequer, George Osborne.

The Footsie gives back a few of the gains made yesterday, largely as a result of the weakness of miners, while banks are also off the boil.

PUTTING ON A SHOW

Exhibitions and conferences firm ITE Group saw adjusted profit before tax in the year to September 30th rise to £51.4m from £36.6m the year before. Revenue climbed to £155.5m from £113.5m last year. The market has been expecting pre-tax profits of £50m on turnover of £153.5m.

Spread betting pioneer IG Group saw a high level of client activity in the second quarter of its financial year, as a result of which it currently expects that it will achieve revenues in excess of £193.0m for the first half, compared to £156.7m in the corresponding period for the prior year. Costs have been in line with management's expectations.

SMALL CAPS ON THE UP

Specialist castings and engineering group Chamberlin said half yearly revenue rose by a quarter and it expects full year results to be in line with current market forecasts.

Shares in oil exploration firm Enquest jumped this morning after it upped production guidance after deciding to develop two new fields. Enquest said it would begin an $850m development of its Alma and Galia fields, subject to anticipated regulatory approvals.

Optical components maker Gooch & Housego reported a 78% surge in full year adjusted pre-tax profit and said it is well positioned to weather the current economic climate. Revenue for the year increased to £61m from £44.7m as robust demand continues for lasers used in manufacturing.

FTSE 100 - Risers
GKN (GKN) 181.70p +2.60%
Randgold Resources Ltd. (RRS) 6,315.00p +1.20%
G4S (GFS) 241.70p +1.05%
Rexam (REX) 341.20p +0.83%
Smith & Nephew (SN.) 569.00p +0.71%
Burberry Group (BRBY) 1,205.00p +0.67%
Bunzl (BNZL) 810.50p +0.56%
Compass Group (CPG) 563.00p +0.54%
IMI (IMI) 751.00p +0.40%
Whitbread (WTB) 1,585.00p +0.38%

FTSE 100 - Fallers
Lloyds Banking Group (LLOY) 23.32p -1.50%
Royal Bank of Scotland Group (RBS) 19.48p -1.32%
Resolution Ltd. (RSL) 236.50p -1.29%
Antofagasta (ANTO) 1,080.00p -1.28%
Xstrata (XTA) 936.60p -1.23%
Rio Tinto (RIO) 3,125.00p -1.23%
Old Mutual (OML) 108.20p -1.19%
International Consolidated Airlines Group SA (IAG) 142.90p -1.18%
Kazakhmys (KAZ) 848.00p -1.11%
National Grid (NG.) 632.00p -1.10%

FTSE 250 - Risers
EnQuest (ENQ) 98.95p +8.74%
Salamander Energy (SMDR) 212.20p +5.31%
ITE Group (ITE) 193.00p +4.49%
IG Group Holdings (IGG) 452.00p +4.20%
Perform Group (PER) 207.40p +3.70%
Carpetright (CPR) 388.00p +3.47%
Mitie Group (MTO) 257.30p +3.29%
Premier Foods (PFD) 4.89p +3.05%
Heritage Oil (HOIL) 171.30p +2.64%
Cable & Wireless Communications (CWC) 37.24p +2.56%

FTSE 250 - Fallers
Unite Group (UTG) 154.80p -3.73%
Kenmare Resources (KMR) 33.03p -3.22%
Mothercare (MTC) 152.90p -2.98%
Stobart Group Ltd. (STOB) 110.10p -2.91%
Thomas Cook Group (TCG) 21.11p -2.85%
Jupiter Fund Management (JUP) 206.00p -2.18%
Renishaw (RSW) 811.50p -1.93%
Rathbone Brothers (RAT) 1,031.00p -1.90%
F&C Commercial Property Trust Ltd. (FCPT) 100.10p -1.77%
Dixons Retail (DXNS) 10.65p -1.75%


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UK Event Calendar
Tuesday November 29

INTERIMS
ACM Shipping Group, Bango, Findel, First Property Group, Iomart Group, NewRiver Retail Ltd. (Reg S), Quintain Estates & Development, Real Estate Credit Investments PCC Ltd, Scapa Group, VP

INTERIM DIVIDEND PAYMENT DATE
Public Service Properties Inves (DI)tments Ltd.

QUARTERLY EX-DIVIDEND DATE
Schlumberger Ltd.

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Business Climate Indicator (EU) (10:00)
Economic Sentiment Indicator (EU) (10:00)
House Price Index (US) (15:00)
PMI Retail (EU) (09:00)
PMI Retail (GER) (08:55)

Q2
Real Estate Credit Investments PCC Ltd

Q3
National Bank of Greece ADR

GMS
Dillistone Group

FINALS
Character Group, Evocutis, Gooch & Housego, Impax Asset Management Group, ITE Group, Topps Tiles

ANNUAL REPORT
Tracsis

AGMS
Aberdeen Asian Smaller Companies Inv Trust, Baillie Gifford Japan Trust, Berkeley Resources Ltd. (DI), British Sky Broadcasting Group, Clean Energy Brazil, Continental Coal Limited (DI), F&C US Smaller Companies, Forte Energy NL, Global Petroleum Ltd., St Ives

UK ECONOMIC ANNOUNCEMENTS
BBA Mortgage Lending Figures (09:30)
Consumer Credit (09:30)
M4 Money Supply (09:30)
M4 Sterling Lending (09:30)
Mortgage Approvals (09:30)
Trends in Lending (09:30)




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Europe open: Ratings agencies spoil the party

FTSE 100 Euronext Dax perf CAC 40


It is case of 'after the Lord Mayor's show' this morning in European equity markets, with stocks giving back some of the strong gains racked up yesterday.

Banks, which saw some of the sharpest rises yesterday on the back of hopes of progress on the Eurozone sovereign debt crisis, are among the big fallers today as the ratings agencies weigh in with some reality checks.

Moody's Investors Service has placed the debt of 87 European banks on review for a possible downgrade due to doubts over previous assumptions of government support.

The credit rating agency states that this decision is based on its view that "within Europe, systemic support for subordinated debt may no longer be sufficiently predictable or reliable to be a sound basis for incorporating uplift into Moody's ratings."

This decision affects banks in 15 European countries although the greatest number of ratings to be reviewed are in Spain (21), Italy (17), Austria (9) and France (7).

Ratings agency Standard and Poor's may be considering putting France's triple A rating under review for a possible downgrade, according to several sources contacted by the French newspaper La Tribune. One of the daily's diplomatic sources stated that the move "could come in a week to 10 days".

Completing the trinity of ratings agencies, Fitch Ratings has cut its outlook on the United States' credit rating to negative from stable, although the agency has opted to keep the nation's triple-A rating intact.

The pan-European Euro Stoxx 50 index is off 12 points at 2,210, while the CAC 40 in Paris is down 26 at 2,987. Much of the fall is down to Credit Agricole, Societe Generale and BNP Paribas, all of which are being sold.

In Frankfurt Deutsche Bank is off the pace, though Commerzbank is moderately firmer. The DAX index is down just 12 at 5,734.

Spirits firm Remy Cointreau is providing a warm glow to shareholders after it announced operating profits for the first half of its financial year that topped market expectations, at 106.2m; the market had pencilled in a figure of 101m.

"The good results in the first half allow us to confirm a substantial increase in earnings at end-March 2012," a statement from the cognac maker said.

CAC 40 - Risers
Pernod Ricard (RI) 68.58 +0.90%
Renault (RNO) 26.14 +0.58%
Essilor International (EI) 51.70 +0.43%
Danone (BN) 47.48 +0.19%
Accor (AC) 19.25 +0.18%
Michelin (ML) 45.10 +0.13%

CAC 40 - Fallers
Credit Agricole (ACA) 4.31 -2.86%
Societe Generale (GLE) 16.88 -2.71%
Suez Environnement Company (SEV) 9.18 -2.60%
BNP Paribas (BNP) 27.82 -2.45%
ArcelorMittal SA (MT) 12.45 -1.74%
Unibail-Rodamco (UL) 130.90 -1.47%
AXA (CS) 9.88 -1.31%
Carrefour (CA) 18.65 -1.30%
Natixis SA (KN) 1.91 -1.19%
Lafarge (LG) 24.75 -1.14%




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US close: Buyers out in force
Optimism over developments in Europe and a strong showing from retailers over the holiday week-end following Thanksgiving Day had US shares rocketing higher, with the Dow showing its biggest daily gain in more than a month.

The Dow-Jones industrial average rose 291 to 11,523 while the broader based S&P 500 jumped 34 to 1,193. Both indices saw their rises pale in comparison with the 86 point rise to 2,527 on the tech-heavy NASDAQ Composite, where online retailer Amazon put in a strong showing on the back of heavy demand for its Kindle range of hand-held communications devices; sales of Kindles were four times what they were in the corresponding week-end of last year.

US retail sales over the Thanksgiving week-end were 16% higher than the year before at $52.4bn, according to a survey conducted by BIGresearch. The average shopper spent $398.62, up from $365.34 a year earlier.

Reports that European authorities may 'fast track' treaty changes, which would allow for strengthened supervision of member states finances, brightened the mood on the US side of the Atlantic, as did other reports which hold that the European Financial Stability Fund will be used to guarantee up to 30% of some countrys debt issues.

It was a quiet day on the corporate news front, which left the stage largely clear for broker comment to generate price movements. Online advertising giant Google was wanted after Citi upgraded the stock to "buy" from "neutral".

The same broker sparked a stampede for shares in Genworth Financial, the best performing constituent in the S&P 500. The threat of bankruptcy has been hanging over the insurer but Citi reckons the bell-up outcome is "not a realistic threat". The shares topped $6, still a couple of dollar shy of Citi's target.

Citigroup itself had a mixed day; the shares did well but the company saw its $285m settlement with the Securities and Exchange Commission (SEC) ruled ineligible by a New York court. News wire Associated Press said Judge Jed Rakoff in New York said the case would have to come to court as there is is an overriding public interest in knowing the truth about whether Citi, as the SEC alleged, misled investors about a mortgage investment.

Morgan Stanley cast its eye over Citi as it issued a note on banks. Citi and charge card firm American Express were both downgraded to "equal weight" from "overweight", while Bank of New York Mellon, The Northern Trust and State Street all got cut to "underweight" from "equal weight".

Morgan Stanley turned more positive on US bank BB&T and Swiss outfit UBS, upgrading both to "overweight" from "equal weight".

Video-streaming and DVD delivery firm Netflix was on many investors' shopping lists after Susquehanna Financial upgraded the stock to "neutral" from "negative".

Fibre-optic equipment maker JDS Uniphase benefited from a research note from Piper Jaffray, which speculated that the company might have been overly pessimistic in its forecast of the impact of the supply chain disruption caused in its fiscal second quarter by the recent flooding in Thailand.

MACRO-ECONOMY

New home sales rose 1.3% on month in October, to an annualised pace of 307,000 (Consensus: 320,000). The previous months reading has been revised down to 303,000, from an original estimate of 313,000.

OTHER MARKETS

Front month crude futures rose $1.44 to $98.21 a barrel in NYMEX trading.

10-year US Treasuries finished well above their lowest levels for the day, shedding 3/32 dollars with yields at dipping back below the two per cent level to 1.97% at the end of trading.

S&P 500 - Risers
Genworth Financial Inc. (GNW) $6.07 +12.62%
First Solar Inc. (FSLR) $44.56 +10.52%
Netflix Inc. (NFLX) $69.95 +9.54%
United States Steel Corp. (X) $24.16 +8.49%
Goodyear Tire & Rubber Co. (GT) $12.90 +8.13%
AK Steel Holding Corp. (AKS) $7.55 +7.24%
JDS Uniphase Corp. (JDSU) $10.25 +7.22%
F5 Networks Inc. (FFIV) $104.66 +7.21%
Monster Worldwide Inc. (MWW) $7.06 +7.13%
Wynn Resorts Ltd. (WYNN) $114.60 +7.08%

S&P 500 - Fallers
AutoZone Inc. (AZO) $319.51 -1.07%
Sears Holdings Corp. (SHLD) $57.83 -0.98%
Apartment Investment & Management Co. (AIV) $20.40 -0.78%
Campbell Soup Co. (CPB) $31.70 -0.47%
Time Warner Cable Inc. (TWC) $57.41 -0.40%
Kellogg Co. (K) $48.62 -0.27%
Integrys Energy Group Inc. (TEG) $48.96 -0.26%
Sherwin-Williams Co. (SHW) $83.63 -0.01%

Dow Jones I.A - Risers
Alcoa Inc. (AA) $9.46 +5.70%
Caterpillar Inc. (CAT) $91.48 +5.49%
Hewlett-Packard Co. (HPQ) $26.53 +4.49%
Chevron Corp. (CVX) $95.77 +3.77%
Boeing Co. (BA) $64.99 +3.52%
Pfizer Inc. (PFE) $19.09 +3.47%
Merck & Co. Inc. (MRK) $34.26 +3.32%
Intel Corp. (INTC) $23.46 +3.21%
United Technologies Corp. (UTX) $73.14 +2.96%
Cisco Systems Inc. (CSCO) $18.01 +2.91%

Dow Jones I.A - Fallers
None

Nasdaq 100 - Risers
First Solar Inc. (FSLR) $44.56 +10.52%
Joy Global Inc. (JOYG) $84.72 +7.54%
Logitech International S.A. (LOGI) $7.96 +7.28%
Wynn Resorts Ltd. (WYNN) $114.60 +7.08%
Amazon.Com Inc. (AMZN) $194.15 +6.44%
Citrix Systems Inc. (CTXS) $68.39 +6.08%
Electronic Arts Inc. (ERTS) $22.09 +6.05%
Autodesk Inc. (ADSK) $31.60 +6.04%
Baidu Inc. (BIDU) $126.81 +5.75%
Nvidia Corp. (NVDA) $14.83 +5.63%

Nasdaq 100 - Fallers
Virgin Media Inc. (VMED) $21.98 -1.17%
Sears Holdings Corp. (SHLD) $57.83 -0.98%


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Newspaper Round Up
George Osborne will raise hopes of a new multi-runway airport in the Thames Estuary today when he commits the Government to a global hub in the South East. The proposal, championed by Boris Johnson, the Mayor of London, and the architect Lord Foster of Thames Bank, will receive full consideration next year, the Chancellor will say, as he vows to lay the foundations for Britain's future beyond the eurozone crisis. Mr Osborne will have to accept that the spectre of recession will hang over Britain next year in a bracing Autumn Statement short of good news. The Office for Budget Responsibility (OBR) is expected to paint a gloomy outlook of slower growth, rising unemployment and higher public borrowing, The Times reports.

Weak growth has blown a 50bn black hole in the Chancellor's deficit reduction programme, according to the Organisation for Economic Co-operation & Development (OECD). The Paris-based think tank's forecast came as it warned that Britain has already begun to slide back into recession and that the Bank of England will have to pump another 125bn into the economy to salvage the recovery. The collapse in growth will trigger a fresh surge in unemployment next year, now forecast to peak at 9.1% in 2013 far above the current 8.3% and putting another 400,000 workers out of a job, on top of the 2.62m already unemployed. () The OECD's forecasts show that the structural deficit, which the Chancellor has pledged to eliminate within five years, will be 5.2% in 2013, compared with the Office for Budget Responsibility's official forecast of 2%, The Telegraph writes.

The City watchdog warned today that traded life policies are high-risk, toxic products that should not be promoted to UK retail investors and is seeking a Europe-wide ban. The policies are popularly known as "death bonds" because investors put their money into a pooled investment or fund that invests in US life insurance policies. In brief, an investor bets on when a particular set of US citizens will die. If these people live longer than expected, the investment may fail. The products are therefore subject to a high level of risk and are affected by developments such as medical advances and lifestyle changes that promote increased longevity. Moreover, they are generally based offshore, so not covered by the Government's Financial Services Compensation Scheme if they fail, The Times says.

An overwhelming majority of the public believes that George Osborne should slow down his spending cuts in order to boost Britain's anaemic growth levels, according to a ComRes poll for The Independent. The findings suggest growing public fears including among the majority of Conservative supporters that the deep cuts may be choking off a recovery. Asked whether the Government should slow the pace of the cuts so that it can try to boost growth, 69% agree and 24% disagree. Even 54% of Conservative supporters want to delay the cuts, as do 71% of Liberal Democrat supporters and 86% of Labour voters, according to The Independent.

Three of UK's largest unions vote for walkout at Unilever, maker of Persil, Pot Noodles and Britain's best-known yeast spread. Production of food institutions including Marmite and the Pot Noodle is under threat after three of Britain's largest trade unions voted for strike action at Unilever. Unilever employees represented by Unite, the GMB and Usdaw are preparing for a series of strikes in a dispute over pension changes, starting with a 24-hour walkout. () "There is a real sense of betrayal over this," said Jennie Formby, Unite's national officer, who said the closure had come only three years after the scheme was shut to newcomers. "Significant numbers of workers are going to lose a major amount of what they expect to get when they retire." Although scheme members will retain the benefits accrued so far, they will now move on to less generous pensions, Formby said, The Guardian reports.

Taxpayers are being taken 'for a ride' over the discount sale of Northern Rock to Virgin Money, it was claimed last night. Experts fear the bank has been sold virtually for free under a deal which could see Sir Richard Branson's empire claim its cash supplies. In theory, Virgin Money is paying 747m after ministers accepted an offer 'in the best interests of the taxpayer'. In practice, it is feared the price tag will be very little as the company can plunder the Rock's 'cash buffer'. These are the reserves built up since the credit crunch. The worries surround the amount of back-up cash which Northern Rock has, known as its Tier One capital ratio, warns The Daily Mail.