ADVFN Morning Euro Markets Bulletin - February 8th 2012

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London close: Losses pared ahead of Greek meeting

Stocks rise with Greece in focus

Market Movers
techMARK 1,995.04 -0.05%
FTSE 100 5,906.47 +0.28%
FTSE 250 11,215.95 +0.20%

Stocks opened higher on Wednesday following two days in the red, with banks and resource stocks providing a lift. Worth noting, the FTSE All-World equity index has risen to its highest level since August.

Markets are looking to Greece to provide a positive solution to its ongoing difficulties after several days of delays. Prime Minister Lucas Papademos is expected to meet the leaders of the other political parties later on today to discuss a draft deal needed to secure the next bailout package.

George Karatzaferis, leader of the LAOS party, told reporters last night: "we can't say a plain yes or no unless we have assurances from the relevant authorities of the state that these actions are constitutional and will lead the country out of the crisis," he said. "There is time. When it comes to the future of the country, we will find the time."

RECKITT RISES AFTER BEATING TARGETS

Cillit Bang maker Reckitt Benckiser said it exceeded its full year targets in 2011, as it announced a strategy for 'continued out-performance'. Net revenue in 2011 rose to £9.49bn from £8.45bn the year before and just a tad higher than market expectations of £9.45bn.

With what was a mixed bag of results for mining titan BHP Billiton, the market reaction was also mixed as shares traded flat early on. There was something for both the bulls and the bears in BHP's interim results, with underlying pre-tax earnings ahead of expectations while the bottom line number was shy of what the market had been anticipating.

Sector peer Rio Tinto saw shares rise after committing a further $3.4bn to the expansion of its Pilbara iron ore operations in western Australia. "Today we are announcing another significant milestone in our drive towards a more than 50 per cent increase in the size of iron ore operations in Western Australia," said Rio's Iron Ore and Australia Chief Executive Sam Walsh.

Russian precious metals group Polymetal International rose after terminating a joint venture as it bought out the remaining 50% stake owned by South Africa-based AngloGold Ashanti for $20m. The transaction will see it take full control of the Veduga gold deposit in the Krasnoyarsk region of Russia.

Financials were in demand early on as Barclays, Man Group, Lloyds, Old Mutual and Schroders on the rise.

Power generator International Power was a heavy faller despite seeing revenues and earnings rise 3% and 8% in the 2011. The company said its hook-up with French utility company GDF SUEZ Energy delivered synergies well ahead of target in 2011.

FTSE 250: SUPERGROUP NOT SO SUPER AS SHARES PLUMMET

Shares in SuperGroup, owner of the Superdry brand, dropped over 15% after it said profit for the year will be towards the lower end of market expectations as it experienced a challenging last three weeks in January. "Following a solid Christmas trading period, which saw like-for-like retail sales of 9.3% in December, there has been a slowdown in the last three weeks of January," the group explained in a company statement.

Emergency repair group Homeserve also fell after saying that its recent travails that are still preventing the group from restarting some marketing operations. This, along with falling customer numbers, means that the group will make 200 lay-offs from its telesales department.

Specialist homewares retailer Dunelm was in demand after reporting a 7.8% rise in pre- tax profit for the half year ended December 31st on revenues that increased 8.8%.

In small cap news, shares in travel operator Thomas Cook rose strongly after the firm said it was offloading its stake in its Indian subsidiary as the group reported a 3% rise in first-quarter revenue.


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FTSE 100 - Risers
Reckitt Benckiser Group (RB.) 3,466.00p +2.48%
Barclays (BARC) 241.55p +2.01%
Rio Tinto (RIO) 3,944.50p +1.94%
Kazakhmys (KAZ) 1,182.00p +1.90%
Man Group (EMG) 137.50p +1.78%
Lloyds Banking Group (LLOY) 35.83p +1.60%
Xstrata (XTA) 1,219.00p +1.58%
Old Mutual (OML) 156.80p +1.42%
Antofagasta (ANTO) 1,352.00p +1.27%
Schroders (Non-Voting) (SDRC) 1,289.00p +1.26%

FTSE 100 - Fallers
International Power (IPR) 330.00p -3.71%
Cairn Energy (CNE) 348.00p -2.41%
Sage Group (SGE) 298.00p -1.91%
Marks & Spencer Group (MKS) 342.90p -0.98%
Next (NXT) 2,731.00p -0.87%
Imperial Tobacco Group (IMT) 2,407.00p -0.86%
Carnival (CCL) 1,985.00p -0.70%
Kingfisher (KGF) 269.60p -0.52%
SSE (SSE) 1,252.00p -0.48%
GlaxoSmithKline (GSK) 1,400.00p -0.43%

FTSE 250 - Risers
Dunelm Group (DNLM) 491.70p +4.64%
New World Resources A Shares (NWR) 543.00p +3.82%
Daejan Holdings (DJAN) 3,065.00p +3.72%
Inmarsat (ISAT) 453.10p +3.64%
Ophir Energy (OPHR) 342.10p +3.04%
Domino Printing Sciences (DNO) 626.50p +2.96%
Henderson Group (HGG) 124.50p +2.89%
Fidelity China Special Situations (FCSS) 83.25p +2.46%
SDL (SDL) 660.00p +1.85%
Moneysupermarket.com Group (MONY) 120.90p +1.77%

FTSE 250 - Fallers
Supergroup (SGP) 595.00p -15.00%
Home Retail Group (HOME) 108.30p -3.22%
Daily Mail and General Trust (DMGT) 448.90p -2.92%
Redrow (RDW) 127.00p -2.08%
Misys (MSY) 320.00p -1.87%
Dixons Retail (DXNS) 14.73p -1.80%
Victrex (VCT) 1,323.00p -1.78%
Persimmon (PSN) 551.00p -1.69%
UK Commercial Property Trust (UKCM) 74.50p -1.65%
Hansteen Holdings (HSTN) 74.05p -1.40%


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Europe close: Greece worries stall rally

FTSE 100 Euronext Dax perf CAC 40


Sharp rises in portuguese banks and

FTSE-100: 0.27%
Dax-30: 0.83%
Cac-40: 0.48%
Ibex 35: 0.40%

Investors again seem to be seeing the glass as being “half full”, with the buying pressure now pushing the main equity benchmarks higher. That despite the postponement of a meeting between Greece´s Prime Minister and the leaders of the country´s main political parties to 10:30am today. The explanation provided for that delay is that the political leaders had not yet received their copies of the draft agreement between the country and its ´troika´ of public sector creditors.

Acting as a backdrop are the remarks from Yuan Gangming, an economist at the Chinese Academy of Social Sciences, to the effect that China may “move shortly” to help Europe resolve its debt crisis by providing an investment of as much as €100bn euros ($132bn).

French drugmaker Sanofi has reported a 13% rise in its quarterly profits, as growth in emerging markets offset patent losses and weakness in Europe, but the company has also warned that profits could drop by as much as 15% this year.

Danish wind turbine maker Vestas Wind Systems is plunging after reporting an annual loss of €166m, roughly four times the amount expected by analysts.

From a sector stand-point the best performing sectors now are: banks (1.61%), basic resources (1.48%) and automobiles (0.98%).

MACROECONOMY

Spain´s industrial production contracted by 3.7% on the year in December (Consensus: -5.7%).
France´s budget deficit improved to €90.8bn in December from €97.2bn the month before.
The German trade balance has come in at €13.9bn in December (Consensus: €14.0bn).
The Swiss unemployment rate rose to 3.4% in January from 3.3% in the previous month.

OTHER MARKETS
Front month Brent futures are rising by 0.334% to $116.63/barrel.
The Euro/dollar is now gaining 0.11% to the 1.3280 dollar mark.

UK Event Calendar

INTERIMS
BHP Billiton, Dunelm Group, Stagecoach Theatre Arts

INTERIM DIVIDEND PAYMENT DATE
Ashtead Group, Halma

INTERIM EX-DIVIDEND DATE
City of London Investment Group, Cohort, Core VCT 'B' Shares, CPL Resources, Foresight 3 VCT, Foresight 4 VCT, Ingenious Entertainment VCT 1, Ingenious Entertainment VCT 1 'C' Shares, Ingenious Entertainment VCT 1 'D' Shares, Ingenious Entertainment VCT 2, Ingenious Entertainment VCT 2 'C' Shares, Ingenious Entertainment VCT 2 'D' Shares, Ingenious Live VCT 1, Ingenious Live VCT 2, Mattioli Woods, Murgitroyd Group, Stagecoach Group

QUARTERLY EX-DIVIDEND DATE
IBM Corp., JPMorgan Claverhouse Inv Trust, Picton Property Income Ltd, Polar Capital Global Healthcare Growth & Income Trust

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Trade (GER) (07:00)
Crude Oil Inventories (US) (15:30)
Current Account (GER) (07:00)
Factory Orders (GER) (11:00)
MBA Mortgage Applications (US) (12:00)
Retail Price Index (GER) (07:00)

Q4
Smurfit Kappa Group, Virgin Media Inc.

GMS
Environ Group (Investments) , Sunkar Resources

FINALS
International Power, New Europe Property Investments, Reckitt Benckiser Group, Smurfit Kappa Group, Virgin Media Inc.

IMSS
Daily Mail and General Trust, Grainger, Supergroup, Thomas Cook Group

EGMS
Thames River Multi Hedge PCC Ltd. Realisation Shares

AGMS
Daily Mail and General Trust, Future, Grainger, Thomas Cook Group

UK ECONOMIC ANNOUNCEMENTS
BRC Shop Price Index (00:01)

FINAL DIVIDEND PAYMENT DATE
Edinburgh Worldwide Inv Trust

FINAL EX-DIVIDEND DATE
Avon Rubber, Henderson Opportunities Trust, Manroy, Sage Group, Victrex, Zytronic


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US open: Stocks come off ahead of key meetings in Greece
Dow rises to highest level since May 2008

Dow Jones: +33 at 12,878
NASDAQ Composite: +2 at 2,904
S&P 500: +3 at 1,347

The Dow Jones industrial average closed at its highest level since May 2008, as hopes rose that Greece is close to agreeing austerity measures.

Blue-chips got off to a dull start but the Dow moved into positive territory by mid-morning on the back of growing optimism over negotiations in Greece, while the US central bank president, Ben Bernanke, did his bit to keep the show on the row when he reiterated that the economy continues to need low rates.

Coca Cola edged up after better than expected quarterly figures, though it was not the eponymous fizzy drink that was behind the out-performance; rather, it was strong sales of teas and juices in Asia.

Theme park operator Walt Disney hardened despite fiscal first quarter revenue at $10.8bn coming in below market expectations of $11.2bn.

Oil and gas titan Anadarko was one of the best performing blue-chips after its fourth quarter production numbers delighted the market. Production was 12% higher year-on-year at 683,000 barrels of oil per day, while the company racked up an average price of $104.82 a barrel for the oil it sold.

MACRO-ECONOMY

Weekly comparable retail sales rose by 1.8% last week, according to the latest ICSC survey data.

The Federal Reserve will release its consumer credit data for the month of December at 8pm.

OTHER MARKETS

West Texas crude for March delivery rose $1.50 to the $98.41 a barrel mark in NYMEX trading.

10-year US Treasuries fell by 19/32 dollars, with yields at 1.97%.


S&P 500 - Risers
Sears Holdings Corp. (SHLD) $47.30 +6.17%
Anadarko Petroleum Corp. (APC) $87.21 +5.24%
Tesoro Corp. (TSO) $27.04 +4.81%
JDS Uniphase Corp. (JDSU) $13.25 +4.66%
Harman International Industries Inc. (HAR) $46.23 +3.86%
Medco Health Solutions Inc. (MHS) $60.62 +3.68%
Assurant Inc. (AIZ) $43.02 +3.56%

S&P 500 - Fallers
Leggett & Platt Inc. (LEG) $22.00 -5.94%
Alpha Natural Res (ANR) $22.31 -5.23%
Dun & Bradstreet Corp. (DNB) $80.22 -4.79%
Peabody Energy Corp. (BTU) $37.41 -3.83%
Unum Group (UNM) $22.76 -3.76%
Becton, Dickinson & Company (BDX) $77.51 -3.75%
Computer Sciences Corp. (CSC) $26.48 -3.53%

Dow Jones I.A - Risers
McDonald's Corp. (MCD) $100.91 +1.43%
Walt Disney Co. (DIS) $40.98 +1.29%
Coca-Cola Co. (KO) $68.55 +0.76%

Dow Jones I.A - Fallers
Bank of America Corp. (BAC) $7.85 -1.51%
JP Morgan Chase & Co. (JPM) $37.87 -0.71%
Alcoa Inc. (AA) $10.67 -0.61%
Verizon Communications Inc. (VZ) $37.92 -0.58%

Nasdaq 100 - Risers
Sears Holdings Corp. (SHLD) $47.30 +6.17%
Logitech International S.A. (LOGI) $8.71 +3.81%
Express Scripts Inc. (ESRX) $50.99 +2.68%

Nasdaq 100 - Fallers
Sandisk Corp. (SNDK) $45.91 -3.47%
Electronic Arts Inc. (EA) $18.49 -2.68%
Urban Outfitters Inc. (URBN) $26.90 -2.11%
Flextronics International Ltd. (FLEX) $6.97 -2.11%


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Wednesday newspaper round-up
Mick Davis has been put on notice to waive his £11m bonus for the completion of Xstrata’s $86bn (£54bn) merger with Glencore. A top five shareholder has told the company that Mr Davis should “be very careful about what his pay rations look for doing a deal he personally benefits from”, whatever his contractual entitlement. The warning, in the wake of the furore over the bonus for Royal Bank of Scotland boss Stephen Hester, comes amid a growing backlash from Xstrata’s leading investors about Glencore’s so-called “merger of equals”. The deal hands Glencore shareholders 55% of the newly titled Glencore Xstrata International (GXI) despite Xstrata assets making up 64% of the new company, The Telegraph reports.

The chief executive of BP has vowed that the company will defend itself “vigorously” if a court case over the Gulf of Mexico oil spill goes ahead.Bob Dudley hinted, though, that an out-of-court settlement was still possible. The prospect of paying out mammoth fines and damages relating to the disaster cast a shadow over the company’s annual results and strategy update yesterday. It increased its dividend for the first time since reintroducing shareholder payments a year ago, but only by one cent. The company needs to conserve cash to settle its spill costs, which in the worst-case scenario would top $60 bn (£38bn). Analysts believe that BP would enrage American politicians if it announced a big dividend rise before the bill was settled. The trial, in New Orleans, is due to start on February 27 and will determine how much in fines and additional damages the company has to pay, The Times says.

Yahoo! chairman Roy Bostock and three other directors are to step down in a boardroom clear-out as the embattled US internet company attempts to win back investor support. The latest board upheaval comes amid a strategic impasse at the group and follows the departure just a month ago of founder Jerry Yang. He quit as a director shortly after the appointment of new chief executive Scott Thompson, the president of online payments service PayPal, who is joining after the acrimonious departure last year of his predecessor Carol Bartz. Mr Bostock announced the latest shake-up on Tuesday night in a letter to shareholders that has raised fresh questions over the progress of Yahoo!’s talks to sell its large majority stakes in China’s Alibaba Group and Yahoo! Japan, according to The Telegraph.

Stephen Hester disclosed that his radical overhaul of Royal Bank of Scotland has so far cost £38bn as he issued a rallying cry to staff urging them to “prove the critics wrong”. Breaking his silence after the furore over his near £1m bonus and Fred Goodwin’s knighthood, Mr Hester emailed employees admitting that such political and media attention “makes the job harder”. Mr Hester waived his bonus last week following a wave of political and public anger. Two days later, his predecessor Mr Goodwin was stripped of his knighthood for his role in the bank’s collapse, which left it in need of a £45bn bailout. “We can’t control the outside world – whether the economic environment or the political one,” Mr Hester said. “That’s not unique to us. But if ever something has been proven over our last three years of history, it’s this – we can successfully overcome great obstacles, The Telegraph writes.

Back in 2008, the Baltic Dry index was an early warning sign of trouble ahead for the global economy. David Blanchflower was a big fan, and used to cite the Baltic Dry when he was trying, unsuccessfully, to persuade his fellow members of the Bank of England's monetary policy committee to cut interest rates in the months before the collapse of Lehman Brothers. In recent days, the Baltic Dry has fallen to a 25-year-low prompting concern that history is about to repeat itself. Even so, the 2.9% fall in German industrial production in December suggests that the Baltic Dry might have collapsed due to both increased supply of shipping and weak demand. Germany is the world's biggest exporter and the hefty slump in output at the tail end of 2011 coincided with the intensification of the crisis in the euro zone. The Baltic Dry needs to be handled with a degree of caution, but it does provide information about trade flows that is both timely – the data is collected daily – and unaffected by speculation. It is worth keeping an eye on, The Guardian says.