Evening Euro Markets Bulletin - 10 Aug 09

by ADVFN.com ADVFN offer FREE streaming stocks and shares data form around the world. SEE MORE

London
Struggling Footsie finishes lower

Market Movers
techMARK 1,379.88 +0.58%
FTSE 100 4,722.20 -0.20%
FTSE 250 8,421.01 -0.01%
Footsie fought to lift itself into the blue all day but remained in the red as banks and miners weigh on the index.
Lloyds Banking, which is apparently mulling a £15bn fundraising to keep down the cost of insuring toxic debt with the Government, fell. Reports in the weekend press suggest the Treasury is backing the plans. Royal Bank of Scotland was down in sympathy.
Miners struggled, with Rio Tinto among the worst performers after China accused it of conducting a six-year spying campaign.
Life insurer Friends Provident topped the risers though after saying it is now is close to agreeing a takeover by Resolution as terms of the original offer were improved. In a statement, Friends Provident confirmed it had received a new offer of 0.9 Resolution shares for each Friends Provident share, worth about £1.85bn.
Construction and regeneration group Morgan Sindall said first half results were in line with expectations despite posting a 28% slide in profits due to the challenging conditions in the period.
Profit before tax fell to £20.5m from £28.6m on revenue that slipped 8% to £1.14bn. Troubled Irish airline Aer Lingus carried 8.2% more passengers in July than last year as the number making short-haul journeys increased, though long-haul passenger numbers fell sharply and the load factor fell.
Occupancy fell again at care home operator Southern Cross over the last three months with the average occupancy of the mature portfolio 87.5% (2008: 89.8%). Revenues in the 14 weeks to 5 July were £254.8m (2008: £245.6m) and operating profits £22.2m (2008: £24.4m). Operating margins were 31.8%, 0.2% lower than during the same period in the prior year.
Recruitment firm Harvey Nash said trading in the six months to June has remained broadly in line with expectations underpinned by its broad portfolio of services. Revenue for the period is in line with the previous year while gross profit for the same period has recorded only a modest decline of 5%.
Just Retirement has extended the timeframe within which Avalon would need to submit a firm offer proposal for the specialist life assurance group. Avalon, which made an approach for Just Retirement in June, now has until 25 September 2009 to make a bid.


US Market
Dow stays in the red

The Dow has moved deeper into the red in midday trade as investors take a break ahead of the Federal Reserve’s two-day meeting.
A dearth of economic and company news is also adding to the inertia.
Across the markets, the Dow Jones is down 27 points to 9342, while the Nasdaq is 7 points lower at 1992. The S&P 500 has fallen 3 points.
Investors are looking towards the upcoming Federal Reserve board meeting and earnings news from some of the nation’s largest retailers.
The Fed's two-day meeting begins Tuesday with a rate decision on Wednesday, while retailers such as Wal-Mart Stores and Macy's report figures this week.
After the close on Friday, Warren Buffett's Berkshire Hathaway posted net quarterly income that surged 14%.
In other corporate news, Mike Zafirovski is stepping down as CEO of Nortel Networks, which is currently liquidating, while six out of the nine directors will also leave.


European Market
Investors take a break

Europe’s blue chips closed in the red, led lower by banking, energy and car shares, as investors are taking a break from the recent rally.
Lloyds Banking is said to be mulling another huge cash call to reduce the costs of signing up to the government's toxic asset protection scheme (APS).
The British bank closed down, while UBS and BNP Paribas were also stuck in the red. The Swiss government held an extraordinary meeting on Monday to discuss UBS’ ongoing US tax evasion case.
On the positive side, German banks held up well, with the country’s largest lender Deutsche Bank and Commerzbank leading the risers.
Across the markets, the German DAX closed down 41 points at 5,418 with the French CAC dropping 17 points to 3,505. The Swiss market fell 19 points to 6,008.
In the energy sector, Royal Dutch Shell and Total were on offer after crude oil prices skidded lower. US light crude for delivery in September dropped below $71 a barrel.
Volkswagen and Daimler were the worst performers in Germany after both carmakers were downgraded at separate brokerage firms.
In economic news, the Sentix research institute said investor confidence in the 16 country eurozone rose to a 12-month high of -17.0 in August.
CAC 40 - Risers
Dexia (DEXB) € 6.41 +5.64%
Lafarge (LG) € 52.95 +2.22%
Vallourec (VK) € 105.85 +1.68%
Accor (AC) € 33.35 +1.31%
Credit Agricole (ACA) € 11.44 +1.10%
Essilor International (EI) € 37.99 +1.01%
EADS (EAD) € 13.78 +0.77%
Peugeot (UG) € 21.41 +0.75%
Pernod Ricard (RI) € 53.13 +0.61%
France Telecom (FTE) € 17.81 +0.56%
CAC 40 - Fallers
Alcatel-Lucent (ALU) € 2.29 -2.84%
Suez Environnement Company (SEV) € 12.70 -2.49%
PPR (PP) € 78.60 -2.42%
ArcelorMittal SA (MT) € 25.77 -2.02%
LVMH (MC) € 62.75 -1.49%
Total (FP) € 37.87 -1.38%
Michelin (ML) € 50.98 -1.35%
Vinci (DG) € 35.91 -1.17%
Societe Generale (GLE) € 52.64 -1.09%
BNP Paribas (BNP) € 54.10 -0.92%


Broker Tip
Road-builders, BAE, Morgan Sindall

The government has been axing road schemes as it seeks to save money and more cuts are likely to follow, said Charles Stanley, which expects these cuts to have serious implications for road-building firms.
Companies likely to feel the biggest impact include WS Atkins, Mouchel, Scott Wilson and RPS, according to the broker.
Charles Stanley pointed to a letter from the Department of Transport to UK regions, which the broker says ‘in essence warns that their road budgets are going to be cut.’
‘We are sellers of almost all the consultant engineers,’ the broker said.
While noting that defence group BAE faces some disruption from reduced military spending in the US and UK, Charles Stanley expects the firm’s diverse business base and wide geographical reach to serve it well.
BAE ‘continues to operate a well balance business,’ with 31% of first half sales from Land & Armaments, 28% from Electronics Intelligence & Support, 24% from Programmes & Support and 16% from its international division International, the broker notes.
Having fallen 12.2% over the past three months, the group is inexpensive, according to Charles Stanley.
It keeps its ‘buy’ rating on the stock.
KBC Peel Hunt thinks Morgan Sindall is still in good shape following this morning’s interim results and keeps its ‘hold’ recommendation on the construction and regeneration group.
Pre-tax profits fell by 28% from the previous year to £20.5m and the outlook remains challenging, but with net cash of £89m, the broker believes ‘the company looks operationally and financially robust.’
‘Despite the long-term value in this well managed group we maintain our HOLD recommendation and 500p target,’ KBC Peel says.