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London
London shares open higher; volatility
with triple witching; Northern Rock gains
Leading shares opened higher as Wall Street closed weaker,
with little on London's economic and corporate agenda to inspire
investors, with Northern Rock recovering from heavy losses,
and triple witching, which takes place mid-morning, also causing
volatile trading.
At 8.54 am the FTSE 100 index was 22.5 points higher at 6,451.5
having closed last night 31 points lower at 6,429, while the
FTSE 250 index was 10.3 points lower at 11,003.5.
Volume was average with 220 mln shares changing hands in 54,917
deals.
The market is expected to undergo volatile trading this morning
with triple witching taking place between 10.10 am and 10.30
am. Triple witching refers to the expiry of the contracts for
stock index futures, index options and equity options all on
the same day.
"This event could prove particularly volatile given recent
market movements based on the deterioration in investor sentiment
emanating from the drying up of liquidity in the global credit
markets," said Keith Bowman, UK equity analyst at Hargreaves
Lansdown Stockbrokers.
Over in Wall Street, stocks retreated from this week's recent
rally, sobered a bit by mixed earnings reports, a tumbling dollar
and surging oil prices.
Lower-than-expected drops in third-quarter profit at several
major companies, including Bear Stearns & Cos and Circuit
City, curbed Wall Street's enthusiasm after the Fed's rate cut,
and nervousness resurfaced about how long it might take for
the economy and corporate America to rebound from the recent
market turmoil.
The Dow Jones Industrial Average index fell 48.86 to 13,766.70,
the Standard & Poor's 500 index fell 10.28 to 1,518.75,
and the technology-dominated Nasdaq composite index fell 12.19
to 2,654.29.
On Asian markets, the Hang Seng index ended the morning down
63.18 points at 25,637.95, while the Nikkei 225 index was 103.70
points lower at 16,310.09.
In Asian trading hours, oil prices were mixed after the key
US futures contract broke through 84 usd a barrel overnight
on fears a storm could threaten facilities in the Gulf of Mexico.
New York's main futures contract, light sweet crude for delivery
in November, which took over Friday, was at 81.70 usd a barrel,
down 8 cents from its US close Thursday of 81.78 usd. Brent
North Sea crude for November delivery was up 3 cents at 79.12
usd.
Turning to the blue chip upside, the banking sector was recovering
from heavy losses with Northern Rock up 6.2 at 191.4 with The
Times reporting RAB Capital had snapped up a 6 per cent stake
in the beleaguered bank.
The article reported that the hedge fund manager is placing
a 50 mln stg bet that its share price would rally. Its peers
were also higher with Alliance & Leicester up 11-1/2 at
767, Barclays up 8 at 635-1/2 and Royal Bank of Scotland gaining
8-1/2 at 513-1/2.
In the midcaps, Bradford & Bingley gained 4-1/4 at 304.
Looking at broker news Carnival edged up 55 at 2,429 with Deutsche
Bank and Morgan Stanley reiterating their 'buy' ratings on the
shares after the group reported a 11.8 pct rise in third-quarter
net profit yesterday, buoyed by a similar rise in revenues.
And Shire was also a major gainer up 27 at 1,183 following bullish
broker comment earlier in the week and positive news the group
had gained market share in the ADHD sector. Its peer Glaxosmithkline
was also 6 higher at 1,342.
Oil stocks were in demand following higher commodity prices
with BG Group up 10 at 858, BP gaining 6 at 696-1/2 and Royal
Dutch Shell 17 higher at 2,107.
Turning to the downside, Kingfisher continued its downward trend
and was the top faller losing 3.9 pence at 178.6, as a cautious
outlook statement offset better-than-expected first-half results
release yesterday.
Elsewhere, housebuilders were also out of favour with Barratt
Developments down 7 at 785 following on from yesterday's cautious
outlook by Citigroup which cut the group to 'hold' from 'buy'
said that it expects no price inflation in 2008. Its midcap
peer Redrow was also 7-1/2 lower at 414.
And Standard Life fell back 3-1/2 at 270-1/2 after Resolution
confirmed yesterday that it had been approached by the group
but no offers made.
Turning to the second liners, Premier Oil was the top riser
up 41 at 1,112 after Credit Suisse upgraded the group to 'outperform'
from 'neutral'. Its peer Cairn Energy was also higher, up 44
at 2,044.
Madrid
MADRID - Market data at 10.10 am:
IBEX-35 index up 68.50 points at 14,495.70
Major gainers:
Main heavyweights, with Telefonica up 0.05 at 19.46 and BBVA
0.02 higher at 16.69.
Santander, up 0.08 at 13.48. Today is reportedly the deadline
for binding offers for various of its emblematic buildings,
as part of the sale of Spain property assets valued by the bank
at around 4 bln eur. The bank is seen booking around 1.4 bln
eur in capital gains from the assets disposal.
Avanzit, up 0.20 or 4.69 pct at 4.46, extending yesterday's
11 pct surge on expectations of positive newsflow from the group's
press conference today at 1 pm. Avanzit chairman Javier Tallada
has been tipped as eyeing Amper., up 0.11 eur at 12.42.
Union Fenosa, up 0.75 at 39.86, after Merrill Lynch upgraded
it to 'buy' from 'neutral' with a target of 46 eur per share.
Iberia, up 0.02 at 3.26, amid continuing European sector M&A
talk.
Enagas, up 0.09 at 18.20.
Major losers:
Sogecable, down 0.18 at 24.85, as uncertainty over football
broadcasting rights continues to weigh on sentiment.
Repsol YPF, down 0.04 at 25.49.
Endesa, down 0.04 at 39.98, and REE, off 0.03 at 35.36, on profit-taking
after recent relative outperformance.
Milan
MILAN - Market data at 10.24 am:
Main Indices
Mibtel at 30,994, up 0.10 pct
S&P/Mib at 40,011, up 0.08 pct
Main S&P/Mib gainers:
Fiat rose 2.91 pct to 19.81 eur after Goldman Sachs increased
its target to 30 eur from 26 with a 'buy' recommendation.
Impregilo added 1.67 pct to 4.863.
Main S&P/Mib losers:
Alitalia fell 1.31 pct to 0.8285 after on profit-taking after
having risen more than 3 pct yesterday on a reported takeover
offer by Air France.
Lottomatica slipped 0.90 pct to 25.39.
Other stocks in the news:
Tod's added 0.19 pct to 58.94. HSBC cut its price target for
the stock to 73 from 76 but confirmed its 'overweight' recommendation.
Mediobanca dropped 0.46 pct to 14.99 after Fiat sold its 1.83
pct stake in the investment to Goldman Sachs International,
which placed it on the market this morning at 14.85-14.95 eur,
according to dealers.
Amsterdam
AMSTERDAM - Market data at 10.35 am
Major indices
AEX 544.24, up 1.80 point, 0.33 pct
AMX Midcap 704.80, up 0.65 point, 0.09 pct
Government bonds mainly flat
Major gainers
Fortis rose 3.49 pct to 27.54 after the bank came out with a
news-loaded statement, saying it has priced the rights issue
for ABN buy at 15 eur per share and hopes to raise 13.4 bln
eur. Fortis also said it plans to sell 10 pct of ABN Amro's
Dutch banking operations and ABN Amro's Hollandsche Bank should
the RBS-led takeover succeeds. About its own operations, Fortis
said it expects FY net pre-divestments to at least meet 4.2
bln eur forecasts. The bank also forecasts a non-material FY
impact from the credit and subprime crisis.
TomTom soared 2.92 pct to 54.55 after Merrill Lynch upped the
share's target to 64 eur from 48, keeping its 'buy' recommendation.
Corio strengthened 1.85 pct to 58.23 .
ASML added 0.90 pct to 22.46 and ASMI was up 1.61 pct to 19.53.
Unibail-Rodamco put on 0.79 pct to 185.97.
ABN Amro went 0.60 pct higher to 36.97 as both Fortis and the
Royal Bank of Scotland came out with share issues.
Royal Dutch Shell lifted 0.29 pct to 31.13.
Imtech rose 0.63 pct to 59.17 after the company won a 21 mln
eur contract to improve the safety of Dutch road infrastructure
in Zuid-Holland and Zeeland.
BAM was up 0.11 pct to 18.65 after associate Van Oord won yesterday
a large dredging order in Singapore which could add 1.3 mln
eur per year to BAM operational results.
Major decliners
Van der Moolen was 2.11 pct lower to 3.24 and SNS Reaal slid
0.76 pct to 15.57.
Vopak lost 1.36 pct to 40.50.
Hagemeyer slipped 1.01 pct to 2.95.
Corporate Express shed 0.87 pct to 7.98 as profit taking took
hold following recent gains on M&A speculation.
Randstad was off 0.83 pct to 38.32.
DSM lost 0.25 pct to 36.40 after the company said it will invest
30 mln eur in building a new factory for waterborne emulsion
resins (NeoCryl) in The Netherlands.
Aegon weakened 0.15 pct to 13.44 after unit Chinese Aegon-CNOOC
Life Insurance Co opened a unit in Hangzhou, the capital of
eastern China's Zhejiang province. The unit will focus on owners
of small and medium enterprises in Zhejiang, as well as their
employees and families.
Boskalis Westminster outperformed the market, shedding 0.09
pct to 31.80, after SNS Securities said the company stood to
benefit from Van Oord's large Singapore dredging order and the
positive consequences it would have on dredging orders worldwide.
Stork edged pct 0.02 lower to 45.21 after workers began a strike
at two of the company's five locations in the Netherlands in
protest against the possibility of the company's split-up. |
