ADVFN Morning Euro Markets Bulletin - April 3rd 2012

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London Market Report


London open: Heritage bubbles higher on Iraqi success

Market Movers

techMARK 2,084.32 +0.19%
FTSE 100 5,887.82 +0.22%
FTSE 250 11,682.46 +0.24%
London has started on the front foot, taking heart from the late surge on Wall Street yesterday, which was sparked by a better-than-expected performance by the Institute of Supply Management's manufacturing index.



Drugs firms in focus

Drugs giant GlaxoSmithKline has received top-line results from seven of the eight 'Harmony' drug development Phase III studies investigating the use of albiglutide in type 2 diabetes. Glaxo said that based on the studies it has performed so far, there is enough information to support progression to regulatory submissions, as a possible once-weekly treatment for type 2 diabetes.

Sticking with the pharmaceuticals sector, Anglo-Swedish drugs giant AstraZeneca is teaming up with US biotechnology company Amgen to jointly develop and bring to market a portfolio of clinical-stage inflammation treatments.

Chip designer ARM is also getting into the collaboration game. It has teamed up with two digital security firms to create a joint venture aimed at creating a secure environment for services running on high-tech gadgets such as smartphones and tablets.

Collaboration is not exactly the watch-word at investment trust Alliance, where the board has given a feisty response to activist investor Laxey Partners' renewed attempt at telling the board how to run the company.

Hedge fund Laxey, which owns 1.7% of Alliance Trust, has called for a number of changes, including the outsourcing of investment management, higher dividends and the opportunity for shareholders to sell their shares to the company at price closer to net asset value per share than the stock is currently trading in the market.

Alliance has responded by accusing Laxey of wasting the board's time and being motivated by short-term self-interest rather than the medium and long-term interests of the wider shareholder base.



Resource stocks

Oil and gas group Heritage Oil has drilled and flowed gas at a reservoir interval at its Miran West-3 well in the Kurdistan Region of Iraq.

African Barrick Gold has revised upwards by 0.5m ounces of gold the resource estimate for its Nyanzaga project in Tanzania after working out how to treat the two mineralised zones of the project, Tusker and Kilimani, as a single pit resource.

Cairn Energy is splashing out $450m dollars on Agora Oil & Gas, a firm with North Sea interests and owned by Lord Rothschild's investment trust, RIT Capital Partners. Meanwhile, mining titan Xstrata has sold a majority interest in its Chilean hydroelectric development company to Origin Energy.

In other mergers and acquisitions news, equipment rental group Ashtead has acquired Philadelphia-based peer Topp Construction Services and its related company Precision Steel Works. The two companies have been bought for a total consideration of $33.5m in cash, which included the among paid to settle Topp's net debt at closing.


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FTSE 100 - Risers
Aberdeen Asset Management (ADN) 264.60p +2.12%
ICAP (IAP) 398.30p +1.40%
Barclays (BARC) 239.55p +1.31%
Lloyds Banking Group (LLOY) 33.97p +1.16%
IMI (IMI) 1,006.00p +1.11%
BG Group (BG.) 1,494.50p +1.08%
Polymetal International (POLY) 946.50p +0.91%
Man Group (EMG) 134.50p +0.90%
Sainsbury (J) (SBRY) 316.60p +0.83%
Royal Dutch Shell 'B' (RDSB) 2,260.00p +0.80%

FTSE 100 - Fallers
Compass Group (CPG) 659.50p -1.71%
Bunzl (BNZL) 1,017.00p -1.07%
Pearson (PSON) 1,212.00p -0.74%
CRH (CRH) 1,292.00p -0.54%
Anglo American (AAL) 2,356.00p -0.53%
Rexam (REX) 430.10p -0.53%
ARM Holdings (ARM) 604.50p -0.49%
Smiths Group (SMIN) 1,059.00p -0.47%
BHP Billiton (BLT) 1,957.00p -0.41%
Kingfisher (KGF) 312.40p -0.35%

FTSE 250 - Risers
Heritage Oil (HOIL) 146.40p +6.09%
Cairn Energy (CNE) 334.00p +4.24%
Ruspetro (RPO) 234.60p +3.67%
Salamander Energy (SMDR) 230.00p +2.45%
Hays (HAS) 87.30p +2.40%
KCOM Group (KCOM) 73.60p +2.22%
Premier Oil (PMO) 400.40p +2.06%

FTSE 250 - Fallers
Redrow (RDW) 125.70p -2.56%
Spirit Pub Company (SPRT) 61.50p -1.99%
Rightmove (RMV) 1,433.00p -1.98%
Brewin Dolphin Holdings (BRW) 171.50p -1.72%
Taylor Wimpey (TW.) 51.25p -1.63%
WH Smith (SMWH) 539.50p -1.55%

UK Event Calendar

Tuesday April 03

INTERIM DIVIDEND PAYMENT DATE
Pennon Group

QUARTERLY EX-DIVIDEND DATE
JP Morgan Chase & Co, Torchmark Corp.

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Auto Sales (US) (15:00)
Factory Orders (US) (15:00)
FOMC Interest Rate Minutes (US) (19:00)
Goods Orders (US) (15:00)

FINALS
Bond International Software, Gulfsands Petroleum, Huntsworth, Johnston Press, Vernalis

UK ECONOMIC ANNOUNCEMENTS
PMI Construction (09:30)




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Europe Market Report

FTSE 100 Euronext Dax perf CAC 40


Europe open: Steady start after Wall Street rally

European indices have opened mixed to firm, driven by demand for banks and energy stocks.

In France, integrated oil giant Total has clawed back some of its recent losses that were suffered in the wake of the gas leak at its North Sea rig.

Also on the comeback trail are banking stocks Societe Generale, Credit Agricole and BNP Paribas; the latter despite reports that Joachim von Schorlemer, head of the bank's operations in Germany, has left the bank after differences over strategy. Banking stocks took a hammering yesterday after disappointing manufacturing data.

In broker action Nomura has downgraded German chemicals firm K+S and Dutch speciality chemicals outfit Akzo Nobel.

In the foreign exchange markets, the dollar remains slightly bearish versus the majors. The Institute of Supply Management's manufacturing index reading in the US yesterday, which came in better than expected, has increased appetite for risk assets. The euro/dollar is trading at $1.33486, cable (£/$) remains comfortably above $1.60, and the dollar/yen recovers from yesterday's steep decline.

On the futures market the most actively traded contract for Brent crude is trading 60 cents lower at $124.83 a barrel.

CAC 40 - Risers
Accor (AC) € 27.77 +2.49%
EDF (EDF) € 17.45 +2.05%
Societe Generale (GLE) € 22.34 +1.89%
Carrefour (CA) € 18.46 +1.79%
Alcatel-Lucent (ALU) € 1.77 +1.78%
Credit Agricole (ACA) € 4.70 +1.64%
Renault (RNO) € 39.51 +1.28%
Alstom (ALO) € 30.46 +1.08%
BNP Paribas (BNP) € 36.03 +0.92%
Bouygues (EN) € 23.11 +0.83%

CAC 40 - Fallers
Legrand SA (LR) € 27.56 -1.50%
ST Microelectronics (STM) € 6.02 -0.92%
GDF Suez (GSZ) € 19.45 -0.61%
Danone (BN) € 52.68 -0.60%
Air Liquide (AI) € 101.95 -0.29%
Technip (TEC) € 88.92 -0.26%
Safran (SAF) € 28.00 -0.25%
L'Oreal (OR) € 92.76 -0.25%
PPR (PP) € 131.20 -0.23%
LVMH (MC) € 131.75 -0.23%


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US Market Report
US close: Manufacturing data pushes markets north



Dow Jones: +0.40% S & P 500: +0.74% NASDAQ: +0.91%

-Major markets rise
-ISM manufacturing data better than expected
-Groupon falls dramatically

A late surge left all the major indices on Wall Street higher, continuing the best start to a year since 2006.

The turning point in the day was the publication of the Institute of Supply Management's manufacturing index, which came in better than expected. It's also wort remembering this is a holiday week, with only four trading days.

Overall the S&P 500 closed at its highest point so far this year, at 1,418 after reaching 1,422 during the day.

ECONOMY

The ISM U.S. manufacturing index rose to 53.4 in March, above the consensus forecast of 53.0.

A Chinese purchasing manager's index came in at 53.1, the highest reading in 11 months.

Spending in the US construction sector fell in February by 1.1%, compared with the forecast rise of 0.7%.



COMPANIES

Fragrance maker Coty has offered to buy cosmetics firm Avon Products at $23.25 per share in cash, a premium of 20% on Friday's close. Avon has rejected the offer.

The Federal Trade Commission (FTD) has approved Express Scripts' purchase of Medco Health Solutions for $29bn.

Groupon has revised its fourth quarter results downwards and confirmed "weakness" in its financial controls.

Bank of America has reduced its recommendation from buy to neutral on internet retailing giant Amazon.com.



SECTORS

The biggest gains were in precious metals (+3%) and non-ferrous metals (+2.5%). The biggest falls have come in housing construction and media.



OTHER MARKETS

The most widely traded futures contract on a barrel of West Texas crude gained 1.72% to hit $ 105.79 a barrel on the NYMEX.

10-year treasury bonds rose 5/$32 pusHing the yield down to 2.194%.

By the close the the euro had fallen 0.12% to $1.3327.

S&P 500 - Risers
Avon Products Inc. (AVP) $22.70 +17.25%
Hartford Financial Services Group Inc. (HIG) $21.95 +4.13%
Abercrombie & Fitch Co. (ANF) $51.62 +4.05%
Denbury Resources Inc. (DNR) $18.90 +3.68%
Textron Inc. (TXT) $28.84 +3.63%
QEP Resources Inc (QEP) $31.55 +3.44%
Apple Inc. (AAPL) $618.63 +3.18%
United States Steel Corp. (X) $30.26 +3.03%
Western Union Co. (WU) $18.13 +3.01%

S&P 500 - Fallers
Lennar Corp. Class A (LEN) $26.57 -2.24%
Amazon.Com Inc. (AMZN) $198.05 -2.20%
Interpublic Group of Companies Inc. (IPG) $11.16 -2.19%
First Solar Inc. (FSLR) $24.53 -2.08%
PulteGroup Inc. (PHM) $8.67 -2.03%

Dow Jones I.A - Risers
Alcoa Inc. (AA) $10.17 +1.50%
Bank of America Corp. (BAC) $9.68 +1.15%
Boeing Co. (BA) $75.17 +1.08%
Chevron Corp. (CVX) $108.30 +1.02%

Dow Jones I.A - Fallers
Home Depot Inc. (HD) $49.99 -0.64%

Nasdaq 100 - Risers
Seagate Technology Plc (STX) $27.96 +3.73%
Qiagen N.V. (QGEN) $16.08 +3.28%
Apple Inc. (AAPL) $618.63 +3.18%

Nasdaq 100 - Fallers
Illumina Inc. (ILMN) $51.37 -2.36%
Research in Motion Ltd. (RIMM) $14.37 -2.24%
Amazon.Com Inc. (AMZN) $198.05 -2.20%
First Solar Inc. (FSLR) $24.53 -2.08%


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Newspaper Round Up
Tuesday newspaper round-up: Hedge funds, Avon, 888 Holdings...

"Europe's most senior financial regulator has hit back at 'rearguard lobbying' by the hedge fund and private equity industries, saying he 'will not be intimidated' by an attempt to undermine a deal to regulate the industry for the first time. The fightback from Michel Barnier, the European Union commissioner for the single market, comes after the industry publicly raised the alarm over technical standards proposed to implement the alternative investment fund managers directive (AIFMD)," according to the Financial Times.

"The fragrance firm behind Beyonce, Lady Gaga and David and Victoria Beckham's scents has made a bid for the troubled cosmetic giant Avon. New York-based Coty's $10bn offer comes as Avon searches for a new Chief Executive and the firm faces a wide-ranging investigation into corruption and bribery charges in its overseas business.

"Coty said it had decided to make its offer public after Avon rejected its initial approach last month. […] In a statement, Avon described the bid as "opportunistic and not in the best interest" of shareholders. The company said the offer was "substantially" the same as the one it had rejected last month," the Guardian writes.

"A London-listed gaming company is in talks with Donald Trump to exploit the looming legalisation of online gambling in America, The Times has learnt. Trump Entertainment Resorts, in which the property mogul has a 10% stake, has been talking to 888 Holdings and other international operators with a view to securing an online poker venture as soon as regulation is introduced. New Jersey, where Trump's Atlantic City headquarters is based, is tipped to be among the first states to pass legislation," reports the Times.

"Businesses are more upbeat about economic prospects than they were at the end of last year, with some activity measures at their best levels in nearly a year, according to the British Chambers of Commerce. The BCC surveyed some 8,000 of its member businesses and found overall growth patterns remain slower than before the recession, with manufacturers reporting stronger prospects than the services sector," according to the Financial Times.

"The Dow Jones Industrial Average closed at its highest level since 2007 after America's manufacturing industry managed to pick up the pace of its expansion last month. The better-than-expected showing from the country's manufacturers in March helped strengthen expectations that the wider US economy enjoyed a stronger first quarter," reports the Telegraph.

"Trinity Mirror has bowed to shareholder pressure by halving any future cash bonus for its Chief Executive Sly Bailey, but it risked investors' wrath because it will not reduce the overall size of her controversial pay package. The owner of the Daily Mirror announced the changes as the annual report showed that Ms Bailey earned £1.3m last year in pay and pension, including a £248,000 cash bonus, despite a 40% plunge in profits," the Independent writes.

"Whoever got there first knew some free publicity was going to come their way. And on Monday, Brian White, an analyst at Topeka Capital Markets, crossed the line by becoming the first Wall Street analyst to declare that Apple shares are worth $1,000. The veteran technology analyst slapped a $1,001 price target on Apple, a verdict unlikely to hurt Topeka Capital Markets, the little-known Wall Street brokerage where he works," according to the Telegraph.