ADVFN Morning Euro Markets Bulletin - Dec 1st 2011

By ADVFN.com
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London Market Reports

Equities becalmed

Market Movers
techMARK 1,844.92 -0.27%
FTSE 100 5,508.40 +0.05%
FTSE 250 10,281.02 -0.33%

Footsie has been bobbing above and below the 5,500 level this morning as the market takes a pause for breath after yesterday's mad rush higher.

REPAIR TO THE PUB

DIY retailer Kingfisher is a top performer after a well-received trading update. The B&Q owner saw year-on-year like-for-like (LFL) sales growth of 1.3% in constant currency terms in the 13 weeks to October 29th, despite stores in the UK & Ireland seeing LFL sales slide 0.7%.

Real ale brewer and pub chain owner Greene King saw adjusted profit before tax in the 24 weeks to October 16th rise 5.0% to £77.2m from £73.1m at the interim stage last year. Revenue rose 9.0% to £527.5m from £484.1m, with food sales up 16%. Current trading is strong, the company said, with retail like-for-like sales up 4% in the last six weeks.

ENGINEERS TAKE A FEW DENTS

Engineers and miners are proving a drag on the index in the early going. GKN and Rotork join their peers in the doldrums after announcing small deals this morning. GKN has offloaded its Aerospace Engineering Services Business in the UK and Australia to QuEST Global Services and QuEST Global Engineering for an undisclosed sum. Rotork has beefed up its valve kits offering through the acquisition of privately-owned Prokits.

In other mergers and acquisitions activity, reinforced polymer technology manufacturer Fenner has acquired the operating assets of Allison Custom Fabrication, a firm which specialises in the design, engineering, machining and metal fabrication of customised material handling equipment, primarily for the mining markets of Pennsylvania and West Virginia.

Yule Catto, the Essex headquartered polymer business, has sold its pharmaceuticals division, Uquifa, to the Indian firm Vivimed Labs, for £35m.

Rio Tinto, the Anglo-Australian mining giant, has claimed victory in its agreed bid for Canadian firm Hathor. So far, shareholders representing just over 70% of the Canadian uranium explorer's issued share capital have accepted Rio's offer, which values Hathor at $654m.

FTSE 100 - Risers
Kingfisher (KGF) 264.70p +3.56%
Amec (AMEC) 890.00p +2.48%
G4S (GFS) 259.90p +1.48%
International Consolidated Airlines Group SA (IAG) 149.60p +1.42%
Royal Bank of Scotland Group (RBS) 21.28p +1.38%
Associated British Foods (ABF) 1,124.00p +1.35%
Standard Chartered (STAN) 1,402.00p +1.30%
HSBC Holdings (HSBA) 500.30p +1.17%
Sage Group (SGE) 293.30p +1.10%
Fresnillo (FRES) 1,728.00p +0.82%

FTSE 100 - Fallers
IMI (IMI) 778.50p -2.44%
Lonmin (LMI) 1,044.00p -2.43%
GKN (GKN) 190.30p -2.16%
BT Group (BT.A) 186.50p -1.84%
Vedanta Resources (VED) 1,043.00p -1.79%
Antofagasta (ANTO) 1,164.00p -1.69%
Weir Group (WEIR) 2,028.00p -1.55%
ICAP (IAP) 350.20p -1.44%
Essar Energy (ESSR) 229.70p -1.29%
Johnson Matthey (JMAT) 1,887.00p -1.26%




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FTSE 250 - Risers
SThree (STHR) 250.80p +3.38%
Perform Group (PER) 218.60p +3.21%
International Personal Finance (IPF) 203.00p +3.05%
Daejan Holdings (DJAN) 2,725.00p +3.02%
Premier Foods (PFD) 6.04p +2.98%
Hansteen Holdings (HSTN) 74.60p +2.90%
Phoenix Group Holdings (DI) (PHNX) 570.50p +2.79%
Bellway (BWY) 747.50p +2.54%
RPC Group (RPC) 344.60p +2.47%
Supergroup (SGP) 470.70p +2.19%

FTSE 250 - Fallers
Thomas Cook Group (TCG) 17.19p -6.01%
Petropavlovsk (POG) 694.50p -4.21%
Ophir Energy (OPHR) 261.00p -3.33%
Misys (MSY) 244.20p -2.83%
Grainger (GRI) 106.70p -2.82%
Telecom Plus (TEP) 779.50p -2.81%
Heritage Oil (HOIL) 186.40p -2.56%
Devro (DVO) 260.00p -2.44%
Shanks Group (SKS) 105.40p -2.41%
Henderson Group (HGG) 113.50p -2.41%

UK Event Calendar

INTERIMS
Consort Medical, Falkland Islands Holdings, Greene King, May Gurney Integrated Services, Telford Homes

INTERIM DIVIDEND PAYMENT DATE
Andrews Sykes Group, ITV, Ladbrokes, Sony Corp., Toshiba Corp.

QUARTERLY PAYMENT DATE
JPMorgan Claverhouse Inv Trust

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Auto Sales (US) (15:00)
Bloomberg Consumer Confidence (US) (14:45)
Construction Spending (US) (15:00)
Continuing Claims (US) (13:30)
Initial Jobless Claims (US) (13:30)
ISM Manufacturing (US) (15:00)
ISM Prices Paid (US) (15:00)
PMI Manufacturing (EU) (09:00)

FINALS
OMG

EGMS
Millwall Holdings, OJSC Phosagro GDR (Regs)

AGMS
AI Claims Solutions, Clinton Cards, Millwall Holdings

TRADING ANNOUNCEMENTS
Kingfisher

UK ECONOMIC ANNOUNCEMENTS
Nationwide House Price Index (07:00)

FINAL DIVIDEND PAYMENT DATE
Impax Asian Environmental Markets, Manchester & London Inv Trust


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European broker round-up

FTSE 100 Euronext Dax perf CAC 40


EADS: Citi reiterates BUY and maintains price target of €27.

Aegon: Nomura downgrades to NEUTRAL from buy.

Wendel: AlphaValue upgrades to BUY from add and raises price taret to €68 from €57.

EDF: AlphaValue downgrades to REDUCE from add and maintains price target of €20.80.

Elan: AlphaValue downgrades to SELL from reduce and maintains price target of €7.10.


FX round-up:

Dollar walloped by central bank move

The dollar plunged against the euro and other major currencies on Wednesday after central banks across the globe took coordinated action to get money flowing round markets.

The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve and the Swiss National Bank agreed to lower the pricing on existing temporary US dollar liquidity swap arrangements by 50 basis points.

In a separate move, China said it would also free up money for its banks to lend.

In recent days the price of swapping euros for dollars through one-month cross-currency basis swaps climbed to its highest rate in three years.

The lower swap rates, the borrowing rates between financial institutions, should improve central bank's ability to keep funds flowing round the global financial system.

Following the announcement the euro rose to $1.3446 compared to $1.3329 before the statement.

Focus also remained on a two-day meeting between in Brussels of finance ministers from the eurozone. Officials gave the green light to releasing Greece’s €8bn aid package, a move that was widely anticipated.

The dollar index, which measures the US currency against a basket of six others, declined to 78.345 from 78.990 the previous session.

Against the yen the dollar traded at ¥77.53 from ¥77.85 on Tuesday. The greenback was also down lost 1.3% versus the Canadian dollar and fell 1% against the Swiss franc.

The pound rallied to $1.5703 from $1.5610 after the morning's coordinated action.


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US Market Reports
Major Averages Close Sharply Higher, At Best Levels Of The Day

Stocks moved sharply higher over the course of the trading day on Wednesday, adding to the strong gains posted on Monday. The markets benefited from news of an effort by global central banks to boost liquidity as well as some upbeat U.S. economic data.

Banking stocks showed a substantial move to the upside over the course of the trading day on the news of the central bank actions. Reflecting the strength among banking stocks, the KBW Bank Index surged up by 7.2 percent, climbing further off last Thursday's nearly two-month closing low.

Within the banking section, Regions Financial (RF) posted a particularly strong gain, surging up by 14.5 percent. Citigroup (C) and JP Morgan (JPM) also posted notable gains.

Significant strength was also visible among steel stocks, as traders expressed optimism about the outlook for global demand. The NYSE Arca Steel Index jumped by 8.8 percent amid standout gains by U.S. Steel (X) and Arcelor Mittal (MT).

Gold stocks also moved sharply higher on the day, driving the NYSE Arca Gold Bugs Index up by 7 percent. The strength in the gold sector came amid a notable increase by the price of the precious metal, with gold for February climbing $31.40 to $1,750.30 an ounce.

Oil service, semiconductor, networking, and housing stocks also saw considerable strength, with oil service stocks moving higher along with the price of crude oil. Most of the other major sectors also showed notable moves to the upside amid broad based buying interest.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow surged up 490.05 points or 4.2 percent to 12,045.68, the Nasdaq jumped 104.83 points or 4.2 percent to 2,620.34 and the S&P 500 soared 51.77 points or 4.3 percent to 1,246.96.


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Thursday newspaper round-up
Britain has entered a second credit crunch, Downing Street said on Wednesday night, as America was forced to intervene to stop the eurozone crisis leading to a global financial collapse. The US Federal Reserve spearheaded a scheme by central banks around the world, including the Bank of England, to lend money to ailing European banks that were struggling to borrow. The emergency action to stop the international financial system from freezing up again was prompted by rumours that a European bank was facing difficulties and could not raise money. Panic started to spread through the German bond markets, which threatened to result in a credit freeze for European banks. Downing Street sources insisted that the global economy was not facing a “Lehman’s moment”, in reference to the collapse of the American investment bank. However, a spokesman for the Prime Minister said: “Clearly there is a very serious situation in the financial markets at this time, The Telegraph reports.

Construction giant Carillion has told 4,500 staff they could lose their jobs following the Government's shock decision to cut solar energy subsidies. The company's energy services division – created following the £306m acquisition of Eaga in April – yesterday warned all former Eaga staff they were at risk of redundancy and began a statutory 90-day consultation period. It is understood that about 1,500 jobs could actually go, but thousands of workers now face an uncertain future and nervous wait over the Christmas period to learn of their fate. Carillion blamed the job cuts directly on the Government's decision to cut solar energy subsidies – the so-called "feed-in tariffs (FIT)" – which pay the owners of solar panels for the electricity they generate for the National Grid, according to The Telegraph.

British families are suffering the worst squeeze in living standards for more than half a century, and will be no better off in 2016 than they were in 2002. The Institute for Fiscal Studies (IFS) revealed yesterday that the average family on middle income will have £2,496 less to spend next year than just three years ago. On the day that 1.5m public sector workers, including headmasters, teachers, nurses and civil servants, walked out in the biggest strike to hit Britain for a generation, the respected think-tank said that the coalition’s offer on pensions would still leave public sector workers with a far more generous package than their private sector counterparts, The Times says.

David Cameron is preparing to forgo the chance of winning back powers from Brussels as he tries to prevent the eurozone crisis from pulling the British economy under. The Prime Minister will urge President Sarkozy tomorrow to end the uncertainties about the future of the euro as quickly as possible. Mr Cameron is ready to see the 17 eurozone countries agree tighter new rules without requiring the blessing of the 10 other members of the European Union, including Britain. (…) Mr Cameron’s message will also anger some Tory MPs who are urging him to exploit the agonies of the euro to extract concessions for Britain. They want to see him negotiate swift new protection for the City from Brussels directives and win a promise of repatriated powers in the medium term, writes The Times.

European leaders were yesterday told they have just ten days to save the single currency amid warnings that meltdown would trigger a brutal recession in Britain. ‘We are now entering a critical period of 10 days to complete and conclude the crisis response of the European Union,’ said EU finance commissioner Olli Rehn. ‘The economic and monetary union will either have to be completed through much deeper integration, or we will have to accept a gradual disintegration of over half a century of European integration,’ The Daily Mail reports.

Fund managers warned yesterday that if Lloyds appoints a deputy to ease the workload of chief executive Antonio Horta Osorio when he returns to work it could trigger further investor uncertainty. Horta-Osorio is off with stress, but the Lloyds’ board might appoint a chief operating officer who would effectively be a deputy to the Portuguese boss who is expected to return by the end of the year. John Smith, fund manager Brown Shipley, said: “He is either chief executive or not. “They need to clear it up.” David Miller at Cheviot Asset Management said: “To try and go for a partial answer, while better than nothing, is still not satisfactory,” according to The Scotsman.