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 |  Subject: ADVFN Evening Euro Markets Bulletin - June. 1st 2010  Tue Jun 01, 2010 3:09 pm | |
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BP slide drags index lower
Market Movers
FTSE 100 5,080.45 -2.08%
techMARK 1,563.03 -0.59%
FTSE 250 9,510.72 -1.31%
All eyes are on BP this morning with shares in the oil giant tumbling as all of its attempts to stem the Gulf of Mexico oil spillage come to nothing.
BP shares opened nearly 15% lower, meaning some £40bn has been wiped off its market value since the crisis started. Attention is also now focusing on the future of chief executive Tony Hayward, with the US government increasingly frustrated by BP's failure to cap the leak. The cost of the clean-up has now reached $1bn, BP added in its latest update.
Meanwhile, the success of Prudential’s $35.5bn bid for American International Group’s Asian business looks in disarray after the US insurer refused to renegotiate the price down to nearer $30bn.
“Following detailed discussions with AIG's management and advisers, Prudential had proposed a revision to the terms that would have reduced the value of the consideration for the acquisition of AIA by Prudential Group plc to US$30.375bn,” it said Tuesday. That will make the EGM on 7 June especially interesting as many shareholders look set to vote against the deal. It was hoped a reduced price might convince the sceptics.
The overall mood has not been helped by the European Central Bank's warning of nearly €200bn of bad loans sitting in European banks' balance sheets. Royal Bank of Scotland is lower. Miners are also under the cosh led by Kazakhmys and BHP Billiton.
Responding to speculation in the week-end press, hotels and coffee shop group Whitbread has said it has no plans to raise funds through an equity issue. The Independent newspaper had run a story on Sunday which suggested that the Premier Inn and Costa Coffee owner is planning to raise £100m this summer through a private placement.
Irish no-frills airline Ryanair swung strongly back into the black last year and proposed a €500m special dividend with the possibility of another €500m in the three years time. Pre-tax profits for the year to March came in at €341 against a loss of €181m. Adjusted profits rose by 204% to €319m allowing for write-downs on its stake in rival Aer Lingus. Revenues were 2% higher at €2.99bn against €2.94bn.
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| | UK Event Calendar for today | INTERIM DIVIDEND PAYMENT DATE
Next Fifteen Communications
QUARTERLY PAYMENT DATE
JPMorgan Claverhouse Inv Trust
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
ABC Consumer Confidence (US) (22:00)
Construction Spending (US) (15:00)
ISM Manufacturing (US) (15:00)
ISM Prices Paid (US) (15:00)
Dallas Fed Manufacturing Activity (US) (15.00)
PMI Manufacturing(EU) (09:00)
PMI Manufacturing(GER) (08:55)
Unemployment Rate (GER) (08:55)
Unemployment Rate (EU) (10:00)
Producer Prices (FRA) (07.45)
Non-farm Payroll (FRA) (07:45)
PMI Manufacturing Survey (FRA) (08:50)
FINALS
Northern Foods, Printing.com, Volex
EGMS
Timestrip
AGMS
Ablon, Bank BPH GDR (Reg S), Global Brands SA, Property Recycling Group, Tomkins, Vernalis
UK ECONOMIC ANNOUNCEMENTS
PMI Manufacturing (09:30)
Halifax House Prices
FINAL DIVIDEND PAYMENT DATE
BAE Systems, Legal & General Group, Total |
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| | European Market report |
BP and banks lead decline
Europe’s main markets have dropped early on Tuesday, with BP’s failure to stem the Gulf of Mexico oil spillage and weak Chinese manufacturing data weighing on shares.
BP shares opened nearly 15% lower, meaning some £40bn has been wiped off its market value since the crisis started.
Attention is also now focusing on the future of chief executive Tony Hayward, with the US government increasingly frustrated by BP's failure to cap the leak. The cost of the clean-up has now reached $1bn, BP added in its latest update.
Across the markets, the Dax in Frankfurt is down 90 points at 5,874, the Cac in Paris has dropped 73 points to 3,435. The Swiss market has fallen 50 points to 6,263.
Banks are also weak after the European Central Bank warned that lenders in the eurozone could face up to €195bn in a second wave of potential loan losses to the end of 2011.
Societe Generale, Credit Agricole, Commerzbank and UBS are all among the worst performers.
CAC 40 - Risers
Cap Gemini (CAP) € 36.72 +0.41%
CAC 40 - Fallers
ArcelorMittal SA (MT) € 23.85 -4.20%
Societe Generale (GLE) € 33.58 -4.19%
Vallourec (VK) € 147.00 -3.38%
Dexia (DEXB) € 3.27 -3.31%
Credit Agricole (ACA) € 8.62 -2.93%
AXA (CS) € 13.07 -2.82%
Technip (TEC) € 51.52 -2.65%
Peugeot (UG) € 19.03 -2.61%
Saint Gobain (SGO) € 30.58 -2.60%
Renault (RNO) € 28.63 -2.57% |
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| | US Market |
Dismal May ends on low note
News that Spain has had its credit rating downgraded a notch sent US stocks tumbling near the close and capped a dismal month for shares on Wall Street.
Dow Jones closed down 122 points at 10,136. Nasdaq gave back 20 at 2,257 while the S&P 500 shed 13 at 1,089.
The fall by the Dow meant the blue chip index suffered its worst May in 70 years, falling by 7.9%, and endured its worst month overall since February 2009. Nasdaq lost 8.3% in May, its worst month since November 2008, while the S&P 500 had its worst May since 1962.
Economics news today revealed April was the first month since September that consumer spending did not increase. This came as a surprise and hints at people saving rather than spending. Personal income grew by 0.4% in April, according to the Commerce Department, as expected, while spending was flat compared with forecasts for a 0.3% increase.
Core personal consumption expenditure was up 0.1%, matching forecasts and the same number as March.
The University of Michigan consumer sentiment index for May provided no surprises, increasing to 73.6 from 72.2 in April and an earlier estimate for May of 73.3.
BP’s leak in the Gulf of Mexico and the suspension of deep water drilling is still having a negative effect on the oil sector. The main fallers in the S&P are oil services companies, including Halliburton, Baker Hughes and Schlumberger.
Apple was in demand after the launch of the iPad in Europe and Asia.
S&P 500 - Risers
Nabors Inds Inc. (NBR) $19.03 +3.48%
Helmerich Payne (HP) $37.68 +2.61%
Cardinal Health Inc. (CAH) $34.47 +2.41%
King Pharmaceuticals (KG) $8.67 +2.36%
Kroger Co (KR) $20.13 +1.41%
S&P 500 - Fallers
Halliburton Co (HAL) $24.83 -8.00%
Diamond Offshore Drl (DO) $63.10 -7.31%
Baker Hughes International (BHI) $38.14 -7.18%
FMC Technologies Inc. (FTI) $58.15 -6.77%
Smith International Inc. (SII) $37.56 -6.50%
Dow Jones I.A - Risers
Coca-Cola Co. (KO) $51.40 +0.33%
Procter & Gamble Co. (PG) $61.09 +0.23%
Merck & Co. Inc. (MRK) $33.69 +0.21%
Dow Jones I.A - Fallers
Walt Disney Co. (DIS) $33.41 -2.79%
Bank Of America Corp. (BAC) $15.74 -2.72%
3M Co. (MMM) $79.31 -2.60%
Caterpillar Inc. (CAT) $60.76 -2.09%
JP Morgan Chase & Co. (JPM) $39.58 -2.08% |
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| | Tuesday newspaper round-up: BP, ECB, Prudential |
More than £6bn was wiped from the market value of BP last night after the oil giant’s latest failure to control its oil spill in the Gulf of Mexico provoked mounting anger in the US.
With markets in London closed, BP’s German-listed shares plunged almost 8 per cent to €5.39 (£4.56) after the US Government warned that the leak from the blown-out Macondo well may not be stopped until a relief well can be drilled in August. The share price collapse was equivalent to a slide in BP’s UK-listed market value of £6.5bn, from £93bn on Friday to £86.5bn,the Times reports.
BP was given permission to drill in the Gulf of Mexico after submitting documents promising it was equipped to deal with a spill 10 times larger than the current leak. The papers will be a further embarrassment to the oil firm, as it currently struggles to contain the spill spewing an estimated 19,000 barrels into the ocean daily, the Telegraph reports.
The European Central Bank sent tremors through financial markets last night when it warned that banks in the eurozone nations faced having to write off another €195bn in bad loans over the next 18 months. In what it predicted would be “a second wave” of loan losses, the ECB forecast a fresh flood of red ink for eurozone banks that already have written off €238bn (£200bn) since the banking crisis erupted, the Times reports.
The Bank of England is sitting on an £8bn net profit from its £200bn quantitative easing (QE) fund. A sharp increase in gilt prices over the past two weeks, as traders pull money out of European investments and into UK government debt, has swung the Bank's QE fund into profit for the first time in months. The news underlines the fact that Britain has unexpectedly established itself as a safe haven destination during the European debt crisis, the Telegraph reports.
Companies in Britain’s dominant service sector suffered disappointing sales and tumbling profits in the three months to May, heightening fears about the solidity of the recovery. Hotels, bars and restaurants suffered a sharp and unexpected drop in business between February and May as consumers reined in their spending, the CBI’s latest snapshot of the services sector will show today, the Times reports.
Google is phasing out the internal use of Microsoft’s ubiquitous Windows operating system because of security concerns, according to several Google employees. The directive to move to other operating systems began in earnest in January, after Google’s Chinese operations were hacked, and could effectively end the use of Windows at Google, which employs more than 10,000 workers internationally, the FT reports.
Rebel Prudential shareholders have warned that even if the company manages to reduce the $35.5bn price tag for AIG’s Asian offshoot AIA, the controversial deal could still be voted down. Last night the Pru and AIG were still locked in negotiations after the British insurer said on Friday that it wanted to renegotiate the price. A holding statement is expected when the London market opens today and sources have indicated that the insurer has until tomorrow — at the very latest — to put a revised offer before shareholders, the Times reports.
Some of the world’s biggest energy companies are stockpiling the nuclear fuel used to power reactors as they try to capitalise on rock-bottom uranium prices. An oversupply of nuclear fuel on international commodity markets has followed five successive years of rapid growth in uranium ore production in Kazakhstan, which has nearly quadrupled its output since 2004. Raw uranium prices have tumbled to around $40 per pound — almost one quarter of the levels of $140 in 2007, the Times reports.
Britain's airlines will today demand compensation for the volcanic ash debacle from the new coalition Transport Secretary. Although meetings have been going on with Whitehall officials since the eruption in Iceland closed parts of European airspace for six days in April, today is the first chance airlines have had to raise the issue with the Secretary of State, Philip Hammond, the Independent reports.
A strong international debut for Apple's iPad had lifted sales of the tablet computer to 2m since its US launch two months ago, the company said, a rate exceeding the most recent public figures for its flagship Mac laptop and desktop computers. Yesterday's disclosure followed three full days of sales in the UK, Germany, Japan and six other nations, the FT reports.
Trafigura, the controversial commodities trader, will go on trial in the Netherlands on Tuesday over claims it illegally exported toxic waste that ended up being dumped in the Ivory Coast. The company, a former employee and the captain of its boat are accused by Dutch authorities of breaching environmental laws in 2006. The oil firm, which strongly denies all allegations, could face fines of £1m, the Telegraph reports.
British Airways faces yet more strikes this summer if chief executive Willie Walsh continues his "hard-man stance" on cabin crew travel perks, the Unite union warned yesterday. Speaking at the opening of Unite's first policy conference in Manchester, Tony Woodley, Unite's joint general secretary, told delegates that the trade union could re-ballot its members as early as next week to extend the 12-week period sanctioned by cabin crews' previous vote, the Independent reports. |
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