ADVFN Morning Euro Markets Bulletin - Dec 5th 2011

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London open: Stocks up on euro hopes, Michael Page tanks

Market Movers


techMARK 1,852.77 +0.17%
FTSE 100 5,572.87 +0.37%
FTSE 250 10,354.27 +0.46%
London's blue chip index has opened higher, building on last week's gains of 7.5%, as a pivotal week in the Eurozone crisis kicks off.

KEY WEEK FOR EURO

French President Nicolas Sarkozy and German Chancellor Angela Merkel are due to meet in Paris today to discuss the centralised control of Eurozone budgets ahead of a key EU summit on Friday.

Meanwhile, Italian Prime Minister Mario Monti announced yesterday that his government has approved a new package of austerity measures through 2014 worth €24bn. The plan includes more than €12bn in spending cuts.

"As the euro area crisis moves towards a critical point, the week ahead looks to be make or break. Euro leaders appear to be gravitating around an IMF-centred solution, with the detail still to be defined. The event of the week is likely to be the EU Leaders' Summit on Friday with a pre-Summit dinner scheduled for Thursday night too," said analysts at Investec.

BANKS RISE, MICHAEL PAGE PLUMMETS

The banks were in demand in the opening minutes as confidence in leaders working to resolve the Eurozone crisis increased. Barclays, Lloyds and Royal Bank of Scotland roared higher.

Defensive stocks were being sold off in early trade, as increased optimism for the Eurozone prompted a heightened risk appetite. Among the fallers were pharmaceutical stocks AstraZeneca and GlaxoSmithKline, utilities companies Centrica and SSE, and tobacco rivals British American Tobacco and Imperial Tobacco.

Gold prices were heading lower, dragging the share prices of Randgold Resources and African Barrick Gold into the red.

On the FTSE 250, recruitment firm Michael Page International plummeted after warning on full-year profits following a significant slow-down in growth in the fourth quarter. Shares dropped nearly 13% after the group said that the Eurozone crisis has "reduced client and candidate confidence". Sector peers Hays was also out of favour.

TUI Travel was higher after posting a 25% increase in annual pre-tax profit despite the challenging geopolitical and economic environment. Pre-tax profit rose to £360m for the year ended 30 September from £289m previously, while revenue rose 9% to £14.7bn. Sector peer Thomas Cook rose in sympathy.

Aberdeen Asset Management was firmer after seeing underlying pre-tax profits jump 44% in the year ended 30 September. The firm's full-year dividend increased from 7p to 9p per share.


FTSE 100 - Risers
Lloyds Banking Group (LLOY) 26.20p +3.17%
Royal Bank of Scotland Group (RBS) 22.29p +3.05%
Barclays (BARC) 194.85p +2.20%
Vedanta Resources (VED) 1,109.00p +2.12%
Cairn Energy (CNE) 278.10p +1.50%
Eurasian Natural Resources Corp. (ENRC) 683.50p +1.33%
Essar Energy (ESSR) 248.60p +1.30%
Wolseley (WOS) 1,947.00p +1.20%
IMI (IMI) 787.50p +1.16%
Tate & Lyle (TATE) 671.50p +1.13%

FTSE 100 - Fallers
Smith & Nephew (SN.) 577.50p -3.10%
GKN (GKN) 191.10p -1.34%
Randgold Resources Ltd. (RRS) 6,655.00p -0.67%
Reckitt Benckiser Group (RB.) 3,189.00p -0.50%
Aggreko (AGK) 1,877.00p -0.42%
British Land Co (BLND) 502.00p -0.30%
AstraZeneca (AZN) 2,915.00p -0.29%
Standard Chartered (STAN) 1,448.50p -0.28%
ARM Holdings (ARM) 599.00p -0.25%
Hammerson (HMSO) 389.80p -0.15%

FTSE 250 - Risers
Premier Foods (PFD) 5.90p +7.47%
TUI Travel (TT.) 177.70p +4.78%
SThree (STHR) 231.50p +4.37%
Thomas Cook Group (TCG) 16.90p +4.26%
Dixons Retail (DXNS) 11.98p +4.17%
Rightmove (RMV) 1,323.00p +3.68%
Aberdeen Asset Management (ADN) 210.00p +3.24%
Pace (PIC) 59.00p +3.06%
Telecom Plus (TEP) 790.00p +2.60%
Stobart Group Ltd. (STOB) 118.90p +2.50%

FTSE 250 - Fallers
Michael Page International (MPI) 317.90p -12.90%
Hays (HAS) 67.45p -5.27%
Computacenter (CCC) 350.20p -4.32%
Hansteen Holdings (HSTN) 71.55p -1.65%
Caledonia Investments (CLDN) 1,438.00p -1.51%
JPMorgan Asian Inv Trust (JAI) 190.00p -1.50%
Shaftesbury (SHB) 493.30p -1.18%
Polar Cap Technology Trust (PCT) 328.50p -0.90%
Home Retail Group (HOME) 97.55p -0.86%


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UK Event Calendar
Monday December 05

INTERIMS
Sirius Real Estate Ltd.

INTERIM DIVIDEND PAYMENT DATE
Rotala

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Factory Orders (US) (15:00)
Goods Orders (US) (15:00)
ISM Non-Manufacturing (US) (15:00)
ISM Services (US) (15:00)
PMI Composite (EU) (09:00)
PMI Composite (GER) (08:55)
PMI Services (EU) (09:00)
PMI Services (GER) (08:55)
Retail Sales (EU) (10:00)

Q3
OJSC Magnitogorsk Iron & Steel Works GDR (Reg S)

FINALS
Aberdeen Asset Management, Treatt, TUI Travel

ANNUAL REPORT
Diploma

EGMS
FRM Diversified Alpha Ltd., Integra Group GDR (Reg S)

AGMS
Creat Resources Holdings Ltd. (DI)

UK ECONOMIC ANNOUNCEMENTS
Official Reserves (09:30)
PMI Services (09:30)




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Europe open: Enter the Federal Reserve?

FTSE 100 Euronext Dax perf CAC 40


The main European equity benchmarks are now registering small gains (FTSE: 0.13%, Euro Stoxx 50: 0.75%, Dax-30: 0.30%, SMI: 0.11%), after having opened close to 1% higher on average this morning, with some benchmarks leaving 'bullish gaps' on their intra-day charts at the start of the day.

Of note, Italian Prime Minister Mario Monti has unveiled €24bn of additional fiscal measures through 2014. Initial market reaction has been positive, with Italian 10 year yields retreating by over 30 basis points, to 6.39%.

Also of interest, the leader of the German SPD, Frank-Walter Steinmeier, yesterday supported EU treaty change and went even further, endorsing the European debt redemption fund proposal put forward by the German council of economic experts.

All of the above ahead of this evening's meeting between the French Prime Minister and his German counterpart, ahead of this Friday's 'make or break' EU summit. Also on investors' radars, this week's meeting of the European Central Bank, on Thursday; even a 50 basis point reduction in the central bank's target rate is possible, as are further measures to ease banks' funding pressures.

A report out in Die Welt holds that the Federal Reserve may contribute to helping the Eurozone through the International Monetary Fund.

From a sector stand-point the best performance is now to be seen in: banks (1.67%), insurance companies (1.64%) and financial services (0.90%).

MACROECONOMY

The Eurozone service sector purchasing managers' index for the month of November has come in at 47.5, versus 46.4 the month before and the 47.8 expected by the consensus.

OTHER MARKETS

The Euro/dollar is now rising by 0.42%, to the 1.3457 dollar level.

Front month Brent crude futures are now moving up by 0.86%, to the 110.99 dollar mark.


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US close: Poor end to a strong week
US stocks finished broadly flat on Friday but still registered an impressive performance for the week. The early gains seen today after the jobless rate fell eased as investors digested the data and uncertainties over the Eurozone weighed on sentiment.

The Dow finished 1 point lower at 12,019, the Nasdaq rose 1 point to 2,627, while the S&P 500 was flat at 1,244. Nevertheless, the benchmarks all finished the week over 7% higher.

MIXED RESPONSE TO JOBS REPORT, EURO UNCERTAINTIES CONTINUE

US non-farm payrolls rose by 120,000 during the month of November, according to the latest data published today by the Department of Labour.

While this was under market consensus expectations of 125,000, the jobless rate fell from 9.0% to 8.6%. However, half of this reduction was due to a fall of 315,000 in the labour force participation rate.

Meanwhile, German Chancellor Angela Merkel and French President Nicolas Sarkozy spoke of their desires for fiscal union in the Eurozone. Yesterday, Sarkozy insisted on the need for governmental convergence amidst the Eurozone members, saying "There can't be a single currency without (these) economies heading towards more convergence."

Comments made on Wednesday by Ollie Rehn, the EU's Economic and Monetary Affairs commissioner that there were "10 days to save the euro" have suggested to markets a plan is being coordinated ahead of the EU heads of government summit scheduled for the 9th of December.

Some reports speak of the possible use of the European Central Bank to help solve the crisis by channelling any funds through the IMF (so as to avoid moral hazard).

BANKS RISE STRONGLY, RIM PLUMMETS

Banks were registering strong gains with Bank of America, Morgan Stanley and JP Morgan Chase & Co among the best performers.

Shares in Blackberry maker Research in Motion dropped after warning that it will miss its full-year earnings forecasts. The company acknowledged that it will be taking a $485m charge in the fiscal third quarter to cover a large stock of PlayBook tablets.

Hard drive maker Western Digital (WDC), which had been affected recently by production problems as a result of massive flooding in Thailand, rose strongly after raising its quarterly revenue outlook.

Fitch Ratings downgraded its rating for Hewlett-Packard from A+ to A with a negative outlook.

Discount retailer Big Lots fell nearly 9% after net earnings fell 75% in the third quarter. Investors seemed underwhelmed after the firm upped its annual earnings guidance.

S&P 500 - Risers
Western Digital Corp. (WDC) $31.44 +7.49%
Morgan Stanley (MS) $15.52 +6.96%
JP Morgan Chase & Co. (JPM) $32.33 +6.14%
Gannett Co. Inc. (GCI) $11.91 +5.77%
Time Warner Cable Inc. (TWC) $63.80 +4.73%
Citigroup Inc. (C) $28.17 +4.37%
Hudson City Bancorp Inc. (HCBK) $5.84 +4.10%
Comcast Corp. (CMCSA) $23.36 +3.50%
Janus Capital Group Inc. (JNS) $6.56 +3.47%
International Paper Co. (IP) $28.77 +3.41%

S&P 500 - Fallers
Tenet Hlthcre Corp. (THC) $4.18 -10.68%
Big Lots Inc. (BIG) $36.28 -8.68%
St Jude Medical Inc. (STJ) $35.83 -7.01%
Boston Scientific Corp. (BSX) $5.50 -6.78%
H&R Block Inc. (HRB) $15.03 -6.41%
Medtronic Inc. (MDT) $34.61 -5.95%
CF Industries Holdings Inc. (CF) $140.73 -4.25%
CenturyLink Inc. (CTL) $35.48 -3.93%
Stryker Corp. (SYK) $47.62 -3.86%
Zimmer Holdings Inc. (ZMH) $48.92 -3.81%

Dow Jones I.A - Risers
JP Morgan Chase & Co. (JPM) $32.33 +6.14%
Bank of America Corp. (BAC) $5.64 +1.99%
Walt Disney Co. (DIS) $36.61 +1.72%
Home Depot Inc. (HD) $39.94 +1.53%
General Electric Co. (GE) $16.09 +1.13%
Alcoa Inc. (AA) $9.91 +1.02%
American Express Co. (AXP) $48.23 +0.92%
Procter & Gamble Co. (PG) $64.66 +0.91%
Boeing Co. (BA) $71.30 +0.45%
AT&T Inc. (T) $28.96 +0.42%

Dow Jones I.A - Fallers
Hewlett-Packard Co. (HPQ) $27.69 -1.88%
Johnson & Johnson (JNJ) $63.47 -1.52%
Travelers Company Inc. (TRV) $54.24 -1.45%
Intel Corp. (INTC) $24.64 -1.12%
Wal-Mart Stores Inc. (WMT) $58.09 -0.89%
Pfizer Inc. (PFE) $19.89 -0.70%
Coca-Cola Co. (KO) $66.38 -0.67%
3M Co. (MMM) $79.76 -0.67%
E.I. du Pont de Nemours and Co. (DD) $47.02 -0.57%
Merck & Co. Inc. (MRK) $35.48 -0.56%

Nasdaq 100 - Risers
Dish Network Corp. (DISH) $26.21 +6.63%
Comcast Corp. (CMCSA) $23.36 +3.50%
Foster Wheeler AG (FWLT) $19.14 +3.40%
Apollo Group Inc. (APOL) $49.89 +2.09%
Sears Holdings Corp. (SHLD) $58.56 +1.88%
Logitech International S.A. (LOGI) $8.21 +1.73%
Garmin Ltd. (GRMN) $37.12 +1.53%
Lam Research Corp. (LRCX) $42.24 +1.44%
Cognizant Technology Solutions Corp. (CTSH) $68.50 +1.35%
Bed Bath & Beyond Inc. (BBBY) $60.81 +1.16%

Nasdaq 100 - Fallers
Research in Motion Ltd. (RIMM) $16.77 -9.74%
Seagate Technology Plc (STX) $16.17 -7.07%
FLIR Systems Inc. (FLIR) $25.74 -3.41%
Biogen Idec Inc. (BIIB) $113.24 -2.78%
Qiagen N.V. (QGEN) $14.53 -2.48%
Celgene Corp. (CELG) $61.21 -2.47%
BMC Software Inc. (BMC) $34.47 -2.32%
Hologic Inc. (HOLX) $17.16 -2.22%
DIRECTV (DTV) $46.82 -2.19%


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Newspaper Round Up
Vladimir Putin's ruling United Russia party appears to have lost the trust of millions of Russians after early results showed it had won less than 50% of the vote in a parliamentary election on Sunday. Russia's central election commission last night said United Russia was leading the elections with 49.99% of the vote with 75 per cent of precincts reporting. Such a result, it would mean Mr Putin's party has haemorrhaged support since it won almost 64% in the last parliamentary election in 2007 and backs up anecdotal evidence that millions of Russians are beginning to tire of the regime's dominance of political life. Mr Putin said the initial results would ensure the country's "stable development". Dmitry Medvedev, the Russian president, said the results reflect "the real set of moods in our country" and was an example of "democracy in action", says The Telegraph.

Britain's manufacturing industry is heading for a sharp slowdown as confidence, orders and output tumble, further undermining hopes that the sector can help lead the country's economic recovery. Industry body the EEF and business advisers BDO today slash their forecasts for 2012 manufacturing growth from 2.2% to 0.9% after reviewing reports from 453 members that reflect the gloomy predictions in the Chancellor's autumn statement last week. After producing a better than expected performance for much of the year the outlook for manufacturing has rapidly deteriorated with the eurozone crisis adding to nervousness, The Telegraph reports.

Anglo-Swedish drug maker AstraZeneca has struck a landmark deal to share potential drugs with academics for free, to aid the search for new medicines. The announcement comes on the same day that David Cameron unveils a new strategy designed to increase collaboration between industry, scientists and the NHS in a bid to aid Britain's £50bn life sciences industry. The Prime Minister will also announce plans to share the NHS patient database with private companies for medical research purposes. Drug makers are coming under pressure to seek innovative research and development models as they struggle to curb costs. Astra's pact with the Medical Research Council (MRC), the first of its kind, will offer 22 clinical compounds to academics for free, according to The Telegraph.

The number of British companies in the traditional areas of manufacturing, services and retail quoted on the London stock market has more than halved over the past decade, according to research seen by The Times. There has been a boom in flotations by natural resources companies, such as oil and gas explorers, and large groups that are not based in Britain but choose to list here. This has masked the decline of British-based companies, particularly small and medium-sized, that either have been taken off the market or have chosen not to float, according to Tim Ward, chief executive of the Quoted Companies Alliance. "These are the engines of growth. We need a culture of equities of the sort that we used to have," he said.

Excessive pay packets of bankers and bosses are set for a crackdown as Deputy Prime Minister Nick Clegg and the Bank of England seek ways to curb out-of-control remuneration and bonuses at the top of corporate culture in Britain. Nevertheless, Barclays is reportedly planning to pay its investment bankers an estimated £5bn this year despite calls for restraint from Bank Governor Sir Mervyn King. Speaking on the BBC's Andrew Marr Show yesterday, Clegg yesterday pledged to balance austerity in the public sector with a crackdown on "abhorrent" top corporate pay. Clegg said action would be taken in the new year to ensure that state employees do not feel like they are doing "all the heavy lifting", but he stressed that the UK government would not be "going round setting pay rates in the private sector", writes The Scotsman.