ADVFN Morning Euro Markets Bulletin - Nov. 24th 2011

By ADVFN.com
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London Market Reports

Thomas Cook, Dixons jump higher

Market Movers
techMARK 1,742.11 -0.12%
FTSE 100 5,139.08 -0.01%
FTSE 250 9,585.98 +0.18%

The Footise was trading broadly flat early on, swinging between small gains and losses in the opening minutes.

Weighing on sentiment was a poll by Reuters/Ipsos MORI which showed that the majority of Britons (58%) believe the economy will get worse over the next year. That is the highest figure since February 2009, when Britain was reeling from the effects of the global credit crisis.

THOMAS COOK JUMPS, DIXONS IN DEMAND

There were some big movers on the FTSE 250 this morning. Struggling travel group Thomas Cook jumped nearly 20%, attempting to claw its way back after plummeting just two days ago on financing concerns. The firm, which was due to report its full-year results today, said it would delay the release until it has asked its banks about borrowing more money, due to a "deterioration of trading in some areas of the business in the current quarter".

TUI Travel, which was taken down by its rival's woes, was also in recovery-mode.

Dixons, the struggling electrical retailer, appears to be stemming losses as it seeks to transform itself into a service led company. Like-for-like sales between July and October were down 3% on the same period of 2010. However, this was an improvement on the previous quarter when like-for-like sales were down 7%. Shares jumped 10%.

Water group Pennon fell lower despite seeing pre-tax profits rise 11.6% in the first half. However, the firm said "Customer demand has fallen by 2.3% on the same period last year, with general economic conditions impacting industrial and commercial customer demand."

On the FTSE 100, Compass was the high riser of the morning, extending gains from yesterday when it announced its full-year results which saw underlying profits rise 10.6% on revenues that increased 9.4%.

Miners were also performing well, with Anglo American, Rio Tinto, BHP Billiton and Vedanta Resources making moderate gains. The mining sector was rising an average 1.14% early on, but still remains over 7% down on the week. Antofagasta was nudging higher ahead of its third quarter statement due later today.

Utilities were among the worst performers, with Severn Trent, Centrica and National Grid all in the red.

FTSE 100 - Risers
Compass Group (CPG) 553.50p +1.75%
Investec (INVP) 323.40p +1.57%
Anglo American (AAL) 2,213.00p +1.12%
ICAP (IAP) 315.00p +1.09%
Rio Tinto (RIO) 3,018.00p +1.09%
Admiral Group (ADM) 874.00p +1.04%
BHP Billiton (BLT) 1,759.00p +1.03%
Barclays (BARC) 149.40p +1.01%
Capital Shopping Centres Group (CSCG) 291.40p +0.94%
Vedanta Resources (VED) 937.50p +0.91%

FTSE 100 - Fallers
Glencore International (GLEN) 375.75p -1.12%
Severn Trent (SVT) 1,535.00p -0.90%
Centrica (CNA) 285.80p -0.87%
Smiths Group (SMIN) 867.50p -0.86%
Aggreko (AGK) 1,687.00p -0.71%
GlaxoSmithKline (GSK) 1,343.00p -0.70%
Schroders (Non-Voting) (SDRC) 1,013.00p -0.69%
BP (BP.) 423.60p -0.66%
National Grid (NG.) 628.00p -0.63%
Tesco (TSCO) 382.45p -0.60%


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FTSE 250 - Risers
Thomas Cook Group (TCG) 13.30p +19.60%
Dixons Retail (DXNS) 10.30p +10.04%
Cable & Wireless Worldwide (CW.) 15.38p +8.31%
Kenmare Resources (KMR) 32.70p +4.54%
Moneysupermarket.com Group (MONY) 104.60p +3.98%
Lancashire Holdings (LRE) 706.00p +3.52%
TUI Travel (TT.) 158.50p +2.92%
F&C Asset Management (FCAM) 66.00p +2.48%
Supergroup (SGP) 446.00p +2.48%
Amlin (AML) 309.60p +2.35%

FTSE 250 - Fallers
Redrow (RDW) 102.10p -2.67%
Hiscox Ltd. (HSX) 358.70p -2.58%
Rathbone Brothers (RAT) 1,026.00p -2.38%
QinetiQ Group (QQ.) 120.70p -2.35%
Renishaw (RSW) 808.00p -2.12%
Heritage Oil (HOIL) 166.70p -1.94%
Tullett Prebon (TLPR) 285.10p -1.79%
Savills (SVS) 275.30p -1.68%
New World Resources A Shares (NWR) 408.10p -1.66%
Pennon Group (PNN) 687.00p -1.43%

UK Event Calendar

INTERIMS
Dixons Retail , Helical Bar, Latham (James), PayPoint, Pennon Group, Severn Trent, Young & Co's Brewery 'A' Shares

INTERIM DIVIDEND PAYMENT DATE
Collins Stewart Hawkpoint, Hansteen Holdings

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
IFO Business Climate (GER) (09:00)
IFO Current Assessment (GER) (09:00)
IFO Expectations (GER) (09:00)

Q3
Antofagasta, Frutarom Indstries Ltd.GDR (Reg S), London Mining

FINALS
Future, Grainger, Phytopharm, Thomas Cook Group

EGMS
Economic Lifestyle Property Inv Co Ltd., JSC Acron GDR (Reg S)

AGMS
eServGlobal Ltd., Hangar 8, Impax Asian Environmental Markets, Leyshon Resources Ltd., Netcall, Ruffer Investment Company Ltd., Wildhorse Energy Ltd. (DI)

UK ECONOMIC ANNOUNCEMENTS
CBI Distributive Trends Surveys (11:00)
CBI Industrial Trends Surveys (11:00)
GDP (output, income & expenditure) (09:30)
M4 Money Supply (estimate) (09:30)
M4 Sterling Lending (estimate) (09:30)
Trends in Lending (09:30)


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FX round-up

FTSE 100 Euronext Dax perf CAC 40


Shunned German bond sale sparks panic

The dollar rose against major currencies on Wednesday as investors watched in disbelief at Germany's failure to attract adequate interest in its bond sale.

It seems German bonds, normally perceived as one of the safest investments in Europe, are now being tarnished by the euro zone crisis. Germany tried to sell €6bn in 10-year bunds but sold under €4bn worth.

The worst received bond sale by Germany since the start of the euro stunned markets and sparked fears that the debt crisis is now contaminating the region's biggest economy. The implications for the euro zone are dire.

The euro fell to a six week low against the dollar $1.3334 compared to $1.3516 late Tuesday. The dollar index, which measures the US currency against a basket of six others, rose to 79.134 from 78.252 late Tuesday.

Against the yen, the dollar rose to ¥77.31 from ¥77.00 on Tuesday.

A weaker than expected report on Chinese manufacturing also drove demand for safe haven currencies. HSBC's 'flash' manufacturing purchasing managers' index fell to 48 in November from 51 in October. A measure below 50 indicates contraction.

Sterling changed hands at $1.5515 from $1.5637 the previous session.

Commodities:

Oil down nearly 2% on eco worries

Crude oil futures settled nearly 2% lower on Wednesday, despite a bigger than expected draw on weekly US stockpiles, as investors winced at weaker than expected Chinese data and surprisingly lacklustre demand for German bunds.

Crude for January delivery declined $1.84 to settle at $96.17 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange fell $2.01 at $107.02 a barrel.

HSBC's 'flash' Chinese manufacturing purchasing managers' index fell to 48 in November from 51 in October. A measure below 50 indicates contraction.

Meanwhile demand for an auction for German 10-year bunds was surprisingly lukewarm, prompting fears that even Germany is increasingly seen as not such assafe place to invest money anymore as the euro zone debt crisis rages on. Germany tried to sell €6bn in 10-year bunds but sold under €4bn worth.

Elsewhere the Energy Information Administration said crude inventories dropped 6.2m barrels last week, despite expectations of little change in the week ended 18 November.

Gasoline stockpiles rose 4.5m barrels, while distillates, fell 800,000 barrels, the EIA reported. Analysts had pencilled in a 1.2m barrel increase in gasoline supplies while distillates were expected to fall 1.5m during the week.

Bullion settled the day lower but off session lows as markets watched nervously as Germany's bond auction pulled in weaker than expected crowds.

Gold for December delivery lost $6.50 to settle at $1,695.90 an ounce on the New York Mercantile Exchange. Silver for December delivery tracked gold's decline, down $1.07 to settle at $31.88 an ounce.

Overall, trading was also lighter than usual as traders squared positions ahead of Thursday's US Thanksgiving holiday.


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US Market Reports
Major Averages Close At Worst Levels In Well Over A Month

Stocks moved sharply lower over the course of the trading day on Wednesday, extending the substantial downward move seen in recent sessions. Concerns about Europe weighed on the markets once again, with traders moving out of stocks ahead of the Thanksgiving Day holiday.

With traders worried about the outlook for global demand, steel stocks turned in some of the market's worst performances. Extending a recent downward move, the NYSE Arca Steel Index fell by 5.1 percent, ending the session at its worst closing level in well over a month.

AK Steel (AKS) and U.S. Steel (X) helped to lead the steel sector lower, plunging by 8.9 percent and 7.6 percent, respectively.

Networking stocks also saw substantial weakness on the day, resulting in a 4 percent loss by the NYSE Arca Networking Index. The index also hit it worst closing level in well over a month amid steep losses by Alcatel-Lucent (ALU) and Acme Packet (APKT).

Considerable weakness was also visible among oil service stocks, which moved lower along with the price of crude oil. With crude for January delivery sliding $1.84 to $96.17 a barrel, the Philadelphia Oil Service Index dropped by 3.7 percent.

Most of the other major sectors also showed significant moves to the downside, reflecting broad based weakness in the markets. Electronic storage, airline, telecom, and banking stocks posted notable losses.

The major averages saw further downside going into the close, ending the session at their worst levels in well over a month. The Dow plummeted 236.17 points or 2.1 percent to 11,257.55, the Nasdaq plunged 61.20 points or 2.4 percent to 2,460.08 and the S&P 500 tumbled 26.25 points or 2.2 percent to 1,161.79.


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Thursday newspaper round-up
"The worst-received bond sale by Germany since the launch of the euro fuelled market fears that the continent’s debt crisis was now affecting Berlin, the region’s biggest economy and key to the survival of the single currency," according to the Financial Times. Yesterday's bond auction raised just two-thirds of the target amount, the paper writes.

According to the Times, "David Cameron is on collision course with Brussels and Paris amid warnings that Britain risks being left behind when the European Union reshapes itself after the eurozone crisis." The paper says that European Commission president José Manuel Barroso told the British Prime Minister to choose between protecting the City and "retaining Britain's clout" before next month's EU summit.

The Bank of England has signalled that it is unlikely to increase quantitative easing until at least February of next year, the Telegraph reports. The minutes of this month's meeting of the Monetary Policy Committee say that it currently sees "little merit in fine tuning" following the decision to ramp up asset purchases by £75bn in October, the paper says.

The chief executive officer of Royal Bank of Scotland, Stephen Hester, said yesterday that investors thought it was "dumb" to put money money into the banking industry, reports the Guardian. "I would be interested to see the investor who wants to put more capital towards UK banks at the moment. They are thinking it is a dumb place to put more capital," he said.

High street giant Marks & Spencer has re-entered into the French market and opened a new store in Paris, following the closure of its 18 previous French stores a decade ago, writes the Independent. "Interest surrounding the opening of the three-storey shop in the shadow of the Arc de Triomphe underlines the scale of the mistake made by the retailer's former management in 2001," the paper says.

"Millions of young people will never be able to buy their first home, with many others having to wait until they reach the age of 44, the Bank of England said yesterday," writes the Daily Mail. David Miles, a leading member of the central bank, reportedly said that British homeownership will fall sharply and the number of people forced to rent properties will rise.