ADVFN Morning Euro Markets Bulletin - Nov. 24th 2010

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London Market Reports
Footsie opens higher

London has opened better than expected thanks to a rebound by the miners and a smattering of good trading updates.

There has also been some easing of tension in Korea, though not in Europe where the EU is heaping pressure on Ireland to agree to its bail-out.

UK banks are weak again becasue of the situation in Ireland. Lloyds, Barclays and Royal Bank of Scotland are all lower.

Miners are ding better today, though, led by Kazakhmys and Xstrata. The pair have been the Duke of Yorks of the sector recently, up one day and down the next.

In company news, Capital Shopping Centres, formerly part of Liberty International, has confirmed it is close to agreeing the purchase of Manchester’s Trafford Centre in a deal worth £1.6bn.

Platinum giant Johnson Matthey saw good growth in most of its markets in the first half, especially catalysts for cars in North America and Asia. Profit before tax rose to £144.1m in the half-year to 30 September from £109.5m the year before.

A bullish Compass has upped its dividend by a third as cash and new business flowed through the contract caterer's door over the past year. Revenues rose by 7.6% to £14.5bn in the year to September, with underlying growth of 3.2%.

Interim results from water supplier United Utilities were slightly ahead of management expectations. In the six months to 30 September the company made an underlying profit before tax of £196.2m, down from £258.2m the year before.

Buy-to-let mortgage lender Paragon reported a sharp increase in full year profit on strong rental demand, a decrease in its provision for losses and as the turmoil of the credit market crisis continues to fade.

Sportingbet, the online bookie, continues to see strong growth in the ‘in play’ side of the business. Amounts wagered in the three month period to 31 October – the group’s first quarter – rose 10.9% to £513.9m from £463.2m the year before, with the sums bet on sporting events in play rising 27%.

HaiKe Chemical, a China-based manufacturer of petrochemicals, speciality chemicals and biochemicals, has seen a 'material improvement' in trading in all of its businesses since its last half-year. The company posted an interim loss of $21.2m, against a profit of $10.8m, but following the recent improvement HaiKEe expects to recoup most of the first half deficit by the year-end.


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UK Event Calendar
INTERIMS
BSS Group, Clyde Process Solutions, FFastFill, Hampson Industries, Johnson Matthey, Liontrust Asset Managament, London & Stamford Property Ltd., Mckay Securities, Scapa Group, United Utilities Group

INTERIM DIVIDEND PAYMENT DATE
Charles Taylor Consulting, Fujitsu Ltd.

INTERIM EX-DIVIDEND DATE
Amec, Cable & Wireless Worldwide, Cranswick, Hill & Smith Holdings, Man Group, Next, Prime People, Record, TalkTalk Telecom Group , UBC Media Group, Victoria, Walker Crips Group

QUARTERLY EX-DIVIDEND DATE
M&G Equity Inv Trust Income Shares

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Continuing Claims (US) (13:30)
Crude Oil Inventories (US) (15:30)
Durable Goods Orders (US) (13:30)
Existing Home Sales (US) (15:00)
FOMC Interest Rate Minutes (US) (19:00)
House Price Index (US) (15:00)
IFO Business Climate (GER) (09:00)
IFO Current Assessment (GER) (09:00)
IFO Expectations (GER) (09:00)
Industrial New Orders (EU) (10:00)
Initial Jobless Claims (US) (13:30)
MBA Mortgage Applications (US) (12:00)
New Homes Sales (US) (15:00)
Personal Consumption Expenditures (US) (13:30)
Personal Income (US) (13:30)
Personal Spending (US) (13:30)
U. of Michigan Confidence (US) (15:00)

Q3
Frontline Ltd., Public Power GDR SA (Reg S)

GMS
WPP

FINALS
Avon Rubber, Compass Group, Future, Optos, Superglass Holdings

SPECIAL EX-DIVIDEND PAYMENT DATE
Gartmore Growth Opportunities

EGMS
Edge Performance VCT 'C' Shares, MTI Wireless Edge Ltd., New World Resources NV (DI), Redefine International

AGMS
Ceramic Fuel Cells Ltd., Clean Energy Brazil, Emblaze Ltd., F&C US Smaller Companies, FRM Credit Alpha Ltd., International Ferro Metals Group, JPMorgan Smaller Companies Inv Trust, Metal-Tech, Metminco Ltd., Nyota Minerals Ltd., Pantheon International Participations, Pochin's, Rolta India Ltd.GDR (Reg S), Sabien Technology Group

UK ECONOMIC ANNOUNCEMENTS
CBI Distributive Trends Surveys (11:00)
CBI Industrial Trends Surveys (11:00)

FINAL DIVIDEND PAYMENT DATE
Stagecoach Theatre Arts

FINAL EX-DIVIDEND DATE
Dunelm Group, JPMorgan Chinese Inv Trust, Northern Venture Trust, Renewable Energy Generation Ltd., United Drug

Q1
Sportingbet


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European Market Reports
SAP no longer rising after Oracle ruling

There is a bit of a north/south divide in early trading in European stock markets with the northern countries opening cautiously firmer and the southern starting out slightly lower.

The Paris CAC 40 index is up 15 at 3,739 and the German DAX is up 34 at 6,739. Spain’s IBEX 35 is down 2 points at 9,690 and Italy’s MIB is off 5 points at 19,945.

Mining shares set about clawing back some of yesterday’s heavy losses as concerns over Korea fade.

President Barack Obama has said the US will hold joint military exercises with South Korea this week, in a show of support for the country.

Obama condemned the attack on South Korea by its northern neighbour and called on the international community “to put pressure on North Korea”.

The Irish Overall Index is 3 points firmer at 2,667 despite credit rating agency Standard & Poor’s cutting the nation’s sovereign debt rating by two notches. The long-term rating has been cut from AA- to A, and the short-term rating from A-1+ to A-1.

In company news, database software giant SAP has lost out to its US rival Oracle in a US court case over copyright infringement.

The German company has been instructed to pay more than $1.3bn in damages to Oracle after the court ruled that a now discontinued division of the company, TomorrowNow, infringed Oracle’s intellectual property rights.

SAP said it was considering its options, including post-trial motions and an appeal, though it said this would be a “prolonged process and we continue to hope that the matter can be resolved appropriately without more years of litigation".

Bank of Ireland is under pressure on expectations that the Irish government will end up as a majority holder as a result of capital injections to stabilise the bank.

French foods group Danone is to buy US frozen yogurt group YoCream for $103m.

CAC 40 - Risers
EADS (EAD) € 16.97 +1.74%
Schneider Electric (SU) € 108.10 +1.26%
Alcatel-Lucent (ALU) € 2.09 +1.16%
Sanofi-Aventis (SAN) € 48.64 +0.84%
Pernod Ricard (RI) € 63.03 +0.78%
Danone (BN) € 46.22 +0.74%
Total (FP) € 38.01 +0.64%
Technip (TEC) € 60.27 +0.63%
Vivendi (VIV) € 19.95 +0.61%
Accor (AC) € 31.85 +0.55%

CAC 40 - Fallers
EDF (EDF) € 32.58 -0.50%
Michelin (ML) € 53.83 -0.50%
ArcelorMittal SA (MT) € 23.58 -0.49%
Bouygues (EN) € 31.73 -0.33%
Suez Environnement Company (SEV) € 13.95 -0.29%
BNP Paribas (BNP) € 50.02 -0.24%
Veolia Environnement (VIE) € 21.94 -0.11%
Cap Gemini (CAP) € 33.80 -0.03%
Societe Generale (GLE) € 38.75 -0.01%


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US Market Reports
Dow tumbles 142

US shares fell sharply on fears that an exchange of fire between North and South Korea could escalate into a full-blown military confrontation.

North Korean rockets fired at the disputed island of Yeonpyeong in the Yellow Sea have killed South Korean marines and injured others, including civilians.

That was enough for investors to evacuate the equities market. Dow Jones tumbled 142 points to 11,036. Nasdaq Composite was 37 lower at 2,494 and the broad-based S&P 500 shed 17 at 1,180.

Concerns over Ireland’s bail-out and fears of default by Portugal and Spain also rattled traders. Portuguese and Spanish bond yields rose. Markets were already shaky in a week shortened by Thursday’s Thanksgiving holiday. Many dealers will extend their break either side of the big day.

There’s some positive economic news though. The American economy grew at an annual rate of 2.5% in the third quarter, according to government statistics. A previous report had it at just 2%.

Hewlett-Packard was the only riser in the Dow. After last night’s close, the computer giant posted fourth-quarter earnings of $1.33 per share. Sales rose 8% to $33.3bn, topping analysts' forecasts of $32.8bn.

Graphic software developer Adobe Systems is in decline because of worries that forecasts for the company may be too high. Signet Jewelers unexpectedly moved into profit in the third quarter.

S&P 500 - Risers
Big Lots Inc. (BIG) $31.13 +5.28%
New York Times Co. (NYT) $8.90 +4.71%
CF Industries Holdings Inc. (CF) $121.47 +2.94%
Hormel Foods Corp. (HRL) $49.15 +2.55%
Monster Worldwide Inc. (MWW) $20.40 +2.41%

S&P 500 - Fallers
Airgas Inc. (ARG) $62.00 -5.92%
Nabors Industries Ltd. (NBR) $21.33 -4.90%
Southwestern Energy Co. (SWN) $36.37 -4.64%
Coca-Cola Enterprises Inc. (CCE) $24.26 -4.26%
Eog Resources Inc. (EOG) $88.70 -4.11%

Dow Jones I.A - Risers
Hewlett-Packard Co. (HPQ) $44.19 +2.17%

Dow Jones I.A - Fallers
Microsoft Corp. (MSFT) $25.14 -2.29%
JP Morgan Chase & Co. (JPM) $37.63 -2.29%
Walt Disney Co. (DIS) $36.12 -2.25%
Merck & Co. Inc. (MRK) $34.81 -2.19%


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Newspaper Round-up
Korea, Mutuals, De La Rue...

The divided Korean peninsula appeared to be teetering on the brink of all-out war yesterday after the North fired dozens of shells across the border during military drills by the South. Two South Korean soldiers were killed and 16 other people were reportedly injured.

The artillery bombardment – one of the heaviest since the Korean War ended without a peace treaty in 1953 – left parts of Yeonpyeong island in the Yellow Sea, north-west of the capital Seoul, in smoking ruins, the Independent reports.

Building societies reacted with concern and surprise yesterday after financial regulators threatened to reverse the freedoms given to them over the past 25 years. Lord Turner, the chairman of the Financial Services Authority, told MPs that he would like to see some of the deregulation of the mutual sector reversed. “The biggest mistake we made, and I think this is something we will be returning to in Parliament, was to allow our mutual sector ... to extend beyond the core business of prime residential lending,” the Times reports.

The former boss of Chloride has been lined up to restore the fortunes of the troubled banknote printer De La Rue. Tim Cobbold has been identified as its new chief executive, but has yet to put pen to paper on a deal to join the Basingstoke-based group, insiders said. Mr Cobbold, 48, led the £1bn sale of Chloride, the secure power systems provider, to Emerson Electric in the summer, the Times reports.

The Irish government is poised to take a majority stake in Bank of Ireland, which will leave the Republic without a single significant lender independent of state control.The increased government stake is under discussion as part of an €85bn rescue package from the European Union and International Monetary Fund, which aims to restore confidence in Ireland’s troubled economy and its ailing banking industry, the FT reports.

Shares closed sharply down in Portugal and Spain last night and the euro slipped further against the dollar as fears grew that Europe’s sovereign debt panic would lead to the next bailout centred on the Iberian Peninsula. A general strike is planned in Portugal today in protest at austerity measures, which would mean that pensions are frozen and public sector pay is cut by an average of 5% in an attempt to reduce the deficit from 7.3% to 4.6% of GDP next year, the Times reports.

SAC Capital, the giant hedge fund run by billionaire Steven Cohen, told its investors that it has received an "extraordinarily broad" subpoena, as the US authorities widened their investigation into suspected insider trading on Wall Street. Mr Cohen's firm was the highest-profile among several to disclosure requests for information yesterday, a day after the FBI raided three hedge funds. More raids are expected in the coming days, and prosecutors are aiming to make arrests and lay charges within weeks, the Independent reports.

America's economic recovery will be weaker than feared next year and do little to bring down unemployment until at least 2013, according to new forecasts from the Federal Reserve.The world's biggest economy will grow between 3% and 3.6%, less than the Fed's June forecast of 3.5% to 4.2% In turn, unemployment, currently 9.6%, will only edge lower to between 8.9% and 9.1% next year. In June, the central bank had forecast it would dip below 9% in 2011, the Telegraph reports.

SAP, Europe’s biggest software company, has been ordered by a US court to pay Oracle $1.3bn (£820m) in the biggest-ever award for copyright infringement. The result of the 11-day trial in Oakland, California, dwarfed the $40m that SAP said it was liable for. Oracle took legal action alleging that TomorrowNow (TN), a US-based division of SAP that it acquired in 2005 and closed in 2008, wrongfully downloaded hundreds of thousands of Oracle’s files, the Telegraph reports.

JPMorgan Chase is close to axing plans to build a £1.5bn European headquarters in Canary Wharf, opting instead for the former UK premises of Lehman Brothers. The bank’s strategy for London has been the subject of intense speculation amid concerns that the abandonment of the 1.9m sq ft Riverside South project would reflect broader industry unease about UK regulatory and tax policy in the wake of the financial crisis, the FT reports.

Capital Shopping Centres is close to agreeing the UK’s largest property transaction with the purchase of the £1.6bn Trafford Centre in a deal that would make John Whittaker, the northern billionaire, its largest shareholder. CSC, the largest retail property company in the UK, is in advanced talks to buy the 1.5m sq ft shopping centre near Manchester that was built by Peel Holdings, the family property company run by Mr Whittaker, the Times reports.