European Indexes End Lower

Subscribe to BusinessWeek

LONDON



The FTSE 100 closed sharply lower Monday, tracking losses on Wall Street amid rumours of a US bank facing liquidity concerns. At home, miners fell on demand woes. WTI hit US$107.40/bbl amid a cold snap in the US firing up energy stocks. At home, in big ticket movers, FRIENDS PROVIDENT [+0.76%] gained on a report that a GBP3.5bn JC Flowers bid was imminent. HSBC [+1.45%] rose on a report it will raise its stake in China's Bank of Communications above the legal limit of 20%. BoCom called the report misleading, Reuters wrote. Tobacco stocks lit up on positive broker notes: Goldman and Deutsche reiterated buy on IMPERIAL TOBACCO [+1.58%] ahead of next week's FY figures, while Deutsche Bank raised its target and estimates [up 3%] on BAT [+2.85%]. Investors hung up on VODAFONE [-1.88%] on an FT report that the company could face a US$2bn tax bill in India after the Hutchison Essar takeover. In earnings, BOVIS HOMES [-12.38%] crumbled after posting a 6.3% fall in FY PTP and warning on volumes. BRIXTON [+3.13%] built up a 2.1% rise in FY adj. NAV. BRIT INSURANCE [-2.59%] said it saw improving market conditions as it unveiled a 2.6% rise in FY PTP and a special DPS of 7p. But the shares fell on concerns over subprime exposure. INTERTEK [+3.96%] posted a forecast-beating 16.5% rise in FY adj. PTP.



PARIS



The CAC 40 [-1.13%] closed the session firmly in the red, well below the 4,600 points line and with 31-9 negative breadth as Wall Street traded lower with financials dragging down the Dow Jones. Back home, financials also fell: BNP PARIBAS [-2.42%], CREDIT AGRICOLE [-2.90%], SOCGEN [-1.42%]. Elsewhere, ARCELOR MITTAL [-4.13%] weighed heavily, falling on fear demand for metals will weaken. In other news, former board member Romain Zaleski is reportedly considering making an offer for Arcelor Mittal's Gandrange steel plant in eastern France. VEOLIA [-4.00%] suffered a host of negative broker changes following last week's FY07 numbers. AIR FRANCE-KLM's [-4.36%] CEO will quit in October when he turns 65, wrote Le Figaro. Separately, February passenger traffic came in up 3.7%. Hangzhou Wahaha reportedly said talks with DANONE [-0.19%] to resolve a long-running dispute have hit an impasse. RENAULT's [-1.58%] j/v partner, Nissan Motor, will introduce an electric vehicle to France by 2012, Journal du Dimanche reported. EADS [-1.26%] continues to seek acquisitions in defence, security or services, Bloomberg reported, quoting a spokesman. In the wider market, THOMSON [-10.92%] erased Friday's gains. It has denied market talk it could cut its dividend. Elsewhere, GECINA [-10.78%] lost ground on speculation its biggest shareholders, Rivero and Sauler, may cut their stakes.



FRANKFURT



Xetra-Dax [-1.01%] finished the first day of the week firmly in the red, as Wall Street was also making losses spurred by concerns over the state of the US economy. In local macro news, German exports grew much stronger than expected, +3.8% vs a consensus of +1%. In corporate news, there was renewed talk of a Nike bid for ADIDAS [+1.53%]. Without citing sources, Focus magazine reported that PORSCHE [-2.58%] planned to eventually lift its stake in VW [+1.65%] to 75%. The company denied these reports in a statement on Bloomberg. Reports suggested that a HYPO REAL ESTATE [-13.55%] staff letter from the CEO noted that profit goals for 2008 had become harder but were still possible. The FTD reported that Norwegian shipping magnate John Frediksen raised his stake in TUI [-4.6%] and won support from other shareholders for a break-up of the group. ALTANA [-2.2%] said there were no talks with US-based Rockwood or its shareholders about a takeover. BMW [-1.24%] reportedly plans to cut 7.5% of its German workforce over two years while increasing production in the US by more than 50% by 2012, driven by the sliding US$. CONTINENTAL [-5.94%] said its EBIT margin will reach 10% by 2010. The FAZ wrote that Italy's Enel is considering buying generation capacity to be divested by E.ON [-0.05%]. In broker news Goldman Sachs downgraded REPOWER [-5.38%] to neutral while cutting its target for NORDEX [-4.29%].



MILAN



Milan ended deep in the red on Monday, hit by weak trading on Wall Street amid rumours of liquidity problems at Bear Stearns. Back home, Air France-KLM is expected to examine a binding offer for ALITALIA [-1.36%] at a board meeting today. The French carrier will only unveil its offer after the state council examines an appeal by Air One tomorrow, according to Sunday's La Repubblica. In further M&A news, AUTOGRILL [-0.37%] will acquire World Duty Free from Spain's Ferrovial for an enterprise value of GBP543.5m. Autogrill will also purchase the remaining 49.95% in the Aldeasa j/v. GENERALI's [-0.72%] BSI unit has completed the acquisition of a 100% stake in Banca del Gottardo from Swiss Life for CHF1.775bn. PIRELLI RE [-0.84%] may sell its non-performing loan business, according to Saturday's Il Sole 24 Ore. The German press reports that ENEL [+0.13%] is mulling buying generation capacity to be divested by E.ON. On the earnings front, PRYSMIAN [-4.51%] reported on Friday that its FY net profit rose to EUR 302m, boosted by higher sales, more profitable products and efficiency gains. In broker action, Goldman cut TELECOM ITALIA's [-2.49%] savings and ordinary target price and keeps buy. Meanwhile, Spain's Telefonica has said that it has no plans in assuming control of the telco, according to Sunday's Il Sole 24 Ore.



SPAIN



Spanish shares came off their early afternoon highs to end in the red as Wall Street trades lower. US financials sink as shares in Bear Stearns drop amid rumours of liquidity problems. Of local note, utilities were among the main gainers as on hopes that the victory of the Socialists in yesterday's general election could lead to a shake-up of the sector. IBERDROLA [+1.21%], GAS NATURAL [+3.74%] and UNION FENOSA [+1.19%] all gained. Elsewhere, COLONIAL [-15.52%] tumbled as there is still no news on any agreement between shareholders and ICD. Elsewhere, FERROVIAL [-0.39%] was in focus as Italy's Autogrill bought BAA's World Duty Free for an EV of GBP543.5m. Meanwhile, Ferrovial will be in the spotlight tomorrow, too, with the UK Civil Aviation Authority due to fix returns on investments for BAA for the next five years. MAPFRE's [+2.8%] chairman has said the insurer is targeting total revenues from operations of over EUR 17.5bn in 2008. Former IMF chief Rodrigo Rato is to chair a new advisory council at CRITERIA [-0.68%]. DERMOESTETICA [-5.43%] is to close down its Italian business, with a EUR 12.6m impact on results. In broker moves, Lehman Brothers lifted REE's [+2.07%] target.