ADVFN Morning Euro Markets Bulletin - Nov. 5th 2010

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London Market Reports
Modest start after yesterday's party

Market Movers
FTSE 100 5,864.40 +0.03%
techMARK 1,751.26 +0.08%
FTSE 250 11,047.74 +0.28%

Footsie has posted more gains but some of yesterday's euphoria has worn off after a mixed day so far for the banks.

Part-nationalised bank Royal Bank of Scotland saw a 10% increase in its core operating profit in the third quarter over the preceding one. Core operating profit, excluding fair value of own debt (FVOD), climbed to £1,732m. The company took an £858m charge in respect of FVOD.

HSBC, meanwhile, warned the pace of growth in emerging markets is slowing and recovery from recession may take longer than in previous downturns. "Our latest data from emerging markets points to a slowdown in the rate of recovery and the likelihood of some bumps in the road ahead,” the banking giant said.

Oil giant Shell has agreed to sell stakes in six Gulf of Mexico oil and gas fields for $450m (£280m) as it seeks to invest in ‘more promising’ growth opportunities. It is selling the Tahoe, Southeast Tahoe, Droshky, Marlin and Dorado fields and a Gulf of Mexico producing shelf property to W&T Energy for $450m.

A good performance from its orthopaedics business helped wound care and artificial joint maker Smith & Nephew over the past three months. Revenues in the quarter to September rose by 4% to $941m, compared to $915m in the same period last year. Pre-tax profits rose to $201m from $173m while trading profit in the quarter was $215m, representing underlying growth of 4%.

Mobile phone retailer Carphone Warehouse is to start paying a dividend after raising its full year earnings forecast on the back of a strong performance from its US operations. It is raising its full-year earnings per share estimate to 13.5p to 14p from a previous range of 11.5p to 11.9p and said it intends to move to a regular dividend policy with a target of about 4.5p a share to be paid in August 2011.

Rentokil has cut its forecast for cost savings this year after more losses and a deteriorating trading picture at its courier arm City Link. The services group kept its earnings guidance for the year unchanged, though, after a strong quarter for its rat catching division.

Funeral home operator Dignity said its businesses continued to perform in line with expectations in the third quarter of 2010. The company saw a 5.8% increase in revenue to £145.2m for the first 39 weeks of the year from £137.3m in the corresponding period of 2009.


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UK Diary of Event
INTERIMS
Carphone Warehouse Group, Toyota Motor Corp.

INTERIM DIVIDEND PAYMENT DATE
Atlantic Global, Bodycote, Derwent London, Dillistone Group, Fiberweb, Forth Ports, Huntsworth, Hydrogen Group, Judges Scientific, Matrix Income & Growth 4 VCT, Mears Group, Motivcom, Nationwide Accident Repair Services, Northbridge Industrial Services, S & U, UK Select Trust Ltd., Weir Group

QUARTERLY PAYMENT DATE
Investors Capital Trust 'A' Shares

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Retail Sales (EU) (10:00)
Factory Orders (GER) (11:00)
Non-Farm Payrolls (US) (13:30)
Private Sector Payrolls (US) (13:30)
Unemployment Rate (US) (13:30)
Pending Homes Sales (US) (15:00)
Consumer Credit (US) (20:00)

Q2
Toyota Motor Corp.

Q3
Commerzbank AG, ReneSola Ltd. (DI), Smith & Nephew

GMS
Rockhopper Exploration

ANNUAL REPORT
Feedback

IMSS
Aer Lingus Group, Biome Technologies, Dechra Pharmaceuticals, HSBC Holdings, Phoenix Group Holdings (DI), Royal Bank of Scotland Group, Unite Group

AGMS
Dechra Pharmaceuticals, Galliford Try, Real Estate Credit Investments Ltd.

TRADING ANNOUNCEMENTS
Carphone Warehouse Group, Rentokil Initial

UK ECONOMIC ANNOUNCEMENTS
Halifax House Price Index (09:30)
Producer Price Index (09:30)

FINAL DIVIDEND PAYMENT DATE
Filtronic, Photo-Me International


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European Market Reports
Markets pause for breath

After yesterday’s strong gains on the back of the Fed’s decision to resume its quantitative easing programme it is a much more measured start for European bourses today.

In Paris the CAC 40 is 3 points firmer at 3,920 while in Frankfurt the DAX is also up 3 points, at 6,737. Spain’s IBEX 35 index is down 32 points at 10,570.

Lafarge, the world’s biggest cement maker, saw third quarter profits dip 8% from a year earlier to €372m. Investment analysts had been expecting net income to be around €357m. Revenue rose 6% to €4.5bn.

Reinsurer Scor’s third quarter net income was 18% higher than a year earlier at €111m.

The French regulator is looking into the acquisition by LVMH of a 17.1% stake in fellow luxury goods firm Hermes International to see whether any rules were broken.

France’s stock market regulations require a company to go public with its shareholding in another company once its stake rises above 5%.

The chairman of the Autorite des Marches Financiers, Jean-Pierre Jouyet said in an interview on French radio thay the regulatory body would be investigating whether LVMH complied with this requirement.

In Germany stocks are mixed, but continued strength of metals prices is bolstering the share price of industrial conglomerate ThyssenKrupp. Sportswear maker Adidas and Nivea skin cream maker Beiersdorf both fall back after broker downgrades.

CAC 40 - Risers
Renault (RNO) € 40.99 +3.03%
ArcelorMittal SA (MT) € 25.51 +2.51%
AXA (CS) € 13.76 +2.34%
Vallourec (VK) € 77.34 +1.75%
Societe Generale (GLE) € 45.51 +1.49%
Bouygues (EN) € 32.90 +1.37%
Alcatel-Lucent (ALU) € 2.36 +1.20%
Saint Gobain (SGO) € 36.05 +1.01%
Peugeot (UG) € 28.73 +0.95%
BNP Paribas (BNP) € 54.80 +0.79%

CAC 40 - Fallers
Alstom (ALO) € 35.22 -1.61%
Credit Agricole (ACA) € 12.35 -0.88%
Lafarge (LG) € 44.90 -0.75%
Total (FP) € 40.33 -0.71%
Dexia (DEXB) € 3.26 -0.58%
Carrefour (CA) € 38.08 -0.57%
L'Oreal (OR) € 85.99 -0.54%
Cap Gemini (CAP) € 34.78 -0.49%
GDF Suez (GSZ) € 28.51 -0.45%
Schneider Electric (SU) € 104.95 -0.43%


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US Market Reports
Stocks add to yesterday's gains

There were more large gains for stocks Thursday as yesterday’s decision to expand quantitative easing continued to engender optimism. Company updates also provided cheer.

The Dow Jones closed up 219 points at 11,434, the S&P 500 closed 23 higher at 1,221 and the Nasdaq finished 37 better at 2,577.

Sentiment was dented slightly by a 20,000 increase in jobless claims last week, but buyers soon put any disappointment aside to join in the general stampede for equities.

They were heartened by news that businesses are getting more productivity out of the people that remain in work. Employee output per hour rose at an annual rate of 1.9% in the third quarter. Worker costs fell for the fifth time in seven quarters.

Meanwhile, the International Council of Shopping Centres said US chain store sales rose by 1.6% in October compared with the same month last year.

That data coincided with strong newsflow from retailers. Limited Brands, the company behind the Victoria’s Secret and La Senza lingerie labels, posted earnings ahead of expectations.

Elsewhere in fashion, Gap jumped after reporting a 2% rise in like-for-like sales in October. So did department store Macy’s after reporting a 2.5% increase.

Market-style fresh food retailer Whole Foods posted strong gains after it doubled profits for the fourth quarter. It also announced that it will be expanding in the UK, including outside London.

In other sectors, mobile phone chips maker Qualcomm was in demand after it forecast better than expected first quarter revenues and profit.

Yesterday’s debutant SodaStream International has jumped for the second day running. The Israel-based company raised $109m at $20 a share.

Education provider Apollo has slumped after the US government said that it will review the administration of federal financial aid at Apollo’s University of Phoenix.


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Friday newspaper round-up
Guy Hands, the owner of EMI, yesterday lost a multibillion-dollar legal battle in which he attempted to prove that the giant US bank Citigroup had tricked him into buying the iconic British music group three years ago.

The decision by an eight-person jury at the US District Court in Manhattan calls into question the future ownership of the 79-year-old music company, the Times reports.

The London stock market climbed to its highest level for two and a half years last night, increasing the value of investments for millions of savers who own shares. The FTSE 100 index of leading shares closed up 113.82 points or 2% at 5,862.79, its highest point since June 9, 2008. Just 18 months ago, the market had sunk below 3,700 following the collapse of Lehman Brothers and the start of the worst recession since the Second World War, the Telegraph reports.

The US Federal Reserve’s decision to pump an extra $600bn into the economy has galvanized emerging market central banks into preparing defensive measures and sparked criticism from leading global economies. The Fed’s initiative, in response to rising concern about the weakness of the US economy, has fuelled fears of a sharp drop in the dollar and a fresh flood of capital inflows into emerging markets, the FT reports.

Sir Richard Branson has hired Deutsche Bank to examine strategic options for Virgin Atlantic in a move that could eventually see him relinquish control of his airline. The Virgin Group founder, who owns 51pc of Virgin Atlantic, has asked the German bank to study the airline's market position in the wake of British Airways' transatlantic tie-up with American Airlines – an alliance Sir Richard vehemently opposed, the Telegraph reports.

The North-South divide in the housing market is widening into a gulf, with the prospects for homeowners — including their ability to secure mortgages — and the outlook for property values diverging ever more sharply. One in ten homeowners in the North West is in negative equity, trapped in properties worth less than the amount they owe and vulnerable to repossession as the public sector sheds jobs, a study by Standard and Poor’s, the ratings agency, shows. That compares with one in 75 in the South, the Times reports.

The government-appointed boss of rail services on the East Coast Main Line in and out of London King’s Cross has strongly criticised National Express, the line’s former operator. Reporting that the East Coast railway made enough profit on the line in the first nine months of public ownership between July 2009 and March this year to pay £52m to the Treasury, Elaine Holt said that she had inherited a mess from the business previously known as National Express East Coast, the Times reports.

Homebuilder Redrow yesterday launched a furious broadside against regulators accusing them of creating a "mortgage famine" on the same day that the Council of Mortgage Lenders (CML) urged the city watchdog to "think again" over tough new rules that its latest research says would prevent 150,000 people from being able to buy or move house in the coming months, the Independent reports.

The scale of debt at Connaught, the collapsed property services group, will be greater than previously thought after administrators found 50,000 invoices that the company had not accounted for. Management accounts had led administrators from KPMG to believe that the social housing maintenance arm of Connaught owed £46m ($75m) to unsecured creditors, on top of the £22m to HMRC, the FT reports.