Friday May 9, 09:36 AM
Euroshares open lower after Asia losses, AIG, Allianz weigh UPDATE
(Updating with full report)
LONDON (Thomson Financial) - Europe's leading exchanges opened with losses Friday, following steep losses in Asia overnight as record oil prices sparked fresh inflationary concerns and after disappointment
from AIG and Allianz weigh on sentiment.
At 9:09 a.m., the DJ STOXX 50 was down 43.72 points or 1.33 percent to 3,231.91, while the DJ STOXX 600 lost 4.36 points or 1.32 percent to 324.92.
In the US overnight, Wall Street closed a quiet session with a moderate advance, with energy and other commodity companies leading the market as oil prices extended their record-breaking run.
The DJIA closed up 52.43 to 12,866.78. Separately, the S&P 500 index rose 5.11 to 1,397.68, and the Nasdaq composite (NASDAQ: news) index gained 12.75 to 2,451.24.
At the close of trade AIG reported a much larger than expected quarterly loss and shares slumped more than 7 percent in after hour deals.
It said first-quarter adjusted net loss came to $1.41 a share, compared to an income of $1.68 a share, in the same period a year ago. The mean estimate of analysts surveyed by Thomson Reuters (TRI.TO - news) was for a loss of 76 cents a share.
The group said it hopes to raise $12.5 billion in new capital.
And there was more disappointment in Asia, with earnings numbers from Toyota and Mitsui Chemical weighing on sentiment.
The Nikkei 225 index fell back 287.92 points to 13,655.34, while the Hang Seng (news) index ended the session 394.11 points lower at 25,055.68.
Also in Asia, crude oil traded near new all-time highs above $124 a barrel on Friday even after the OPEC cartel insisted the market is well-supplied and being driven by speculators.
Analysts said OPEC's view has already been factored into prices.
Back in Europe, German insurance giant Allianz said it will be hard to achieve its mid-term targets in the current environment, adding to the gloom among insurers.
The stock fell back 1.55 percent, with slightly better-than-expected first-quarter numbers capping losses.
Staying in Germany, chemical group Linde (Xetra: 648300 - news) shed 2.7 percent after it failed to meet analyst expectations on an operating basis.
And in the Netherlands, Ahold (Amsterdam: AH.AS - news) lost 0.5 percent after its first-quarter sales report came in at the top end of analyst expectations but also unveiled a weakness in growth in the North American market.
In other news, Sanofi (Paris: FR0000120578 - news) -Aventis shed 3.8 percent following news Swiss rival Schweizerhall is close to receiving approval for a generic version of Sanofi's blockbuster drug Plavix. Schweizerhall shares rallied 8.49 percent.
According to a Paris-based dealer, Schweizerhall has announced that it expects approval of its generic Plavix very soon and is planning to launch the compound throughout the European Union via partner generic firms.
Another dealer at a European brokerage said the news represents a major threat to Sanofi, which generates some 2 billion euros of sales from Plavix, its blockbuster blood-thinning drug.
On the gainers board, AMG soared 8.7 percent, boosted by strong first-quarter results which prompted Petercam to upgrade the stock to 'buy' from 'add'.
In a note, Petercam said the reported net profit of $22.5 million exceeded its estimate of $19.3 million and was driven by a better-than-expected EBIT.
The broker said it expects to modestly raise its EPS estimates (5 percent to 10 percent), which currently stand at $3.93 for 2008 and $7.42 for 2009.
Turning to M&A-related news, shares in EDF (Paris: FR0010242511 - news) and E.ON bucked the overall negative trend this morning, up 0.51 and 2.67 percent respectively, amid rumours that EDF could push for a tie-up with its German peer to acquire British Energy (LSE: BGY.L - news) .
German media reports, suggesting that RWE (Xetra: 703712 - news) has abandoned a bid for the whole of British Energy Group as its potential partner, Vattenfall SE, has been blocked from bidding by the Swedish government, also boosted shares in E.ON.
And among telecom groups, Telekom Austria (Vienna: TKA.VI - news) climbed to the top of the STOXX 200, up 1.25 percent, following a report in daily Der Standard, which said the group's principal shareholder, Austria's state industrial holding OIAG, is mulling the merits of splitting the group into separate mobile phone and fixed-line companies.
Meanwhile, several companies are trading ex-dividend today, including Vivendi (Paris: FR0000127771 - news) , Groupe Danone and Suez (Paris: FR0000120529 - news) , Erste Bank, H&M and Nokia (Xetra: 870737 - news) as well as BMW (Xetra: 519000 - news) and Deutsche Postbank (Xetra: 800100 - news) .
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