Friday May 9, 12:58 PM
Paris shares sharply down midsession, led by financials as risk appetite falters
PARIS (Thomson Financial) - Share prices were sharply lower midsession, with financial stocks leading the way, as investor appetite for risk waned amid soaring oil prices and disappointing results from insurers AIG and Allianz.
At 1.30 p.m. the CAC-40 index was down 112.80 points or 2.23 percent at 4,942.78 and the SBF-120 was down 77.54 or 2.11 percent at 3,593.39.
On the Matif, May CAC-40 futures were trading at 4,926.00 and the euro was quoted at $1.5455 compared to $1.5398 late Thursday.
'Markets have risen sharply since the Bear Stearns (NYSE: BSC - news) bailout (late March), and now need to calm down a bit. True, we're probably over the worst but the rally was going too fast and then we've got energy prices are getting to mad levels,' said a dealer at a European brokerage.
In Paris credit fears continued to weigh on financials ahead of next week's first quarter earnings publications, exacerbated by disappointing results from insurers Allianz and American International Group Inc.
Axa (Paris: FR0000120628 - news) fell 0.75 euros or 3.12 percent to 23.27, while Societe Generale (Paris: FR0000130809 - news) dropped 2.60 or 3.51 percent to 71.51.
BNP Paribas (Paris: FR0000131104 - news) shed 2.00 or 2.90 percent to 66.89 and Credit Agricole (Paris: FR0000045072 - news) was down 0.46 or 2.14 percent at 21.05.
Pharmaceuticals major Sanofi (Paris: FR0000120578 - news) -Aventis fell 2.17 or 4.30 percent to 48.28 after Swiss rival Schweizerhall said it is set to gain approval in Germany for a generic version of Sanofi's blood-thinner Plavix.
In a statement, Schweizerhall said first sales of its generic clopidogrel, developed by its German unit Cimex, are expected in the current quarter.
Landsbanki Kepler cut its target price for Sanofi-Aventis to 46 euros on the back of the news, saying generic competition will weigh on the share and sales forecasts could be cut substantially.
Outside the CAC-40, media group Publicis (Paris: FR0000130577 - news) was down 0.70 or 2.68 percent at 25.45, hit by a downgrade to 'hold' from 'buy' at ABN Amro (Amsterdam: ABAGB.AS - news) .
In a note Friday, the broker said the European media sector is in a 'twilight zone', as the macro environment suggest a serious slowdown is imminent.
It slashed its target price for Publicis to 24.7 euros from 34.0 euros, and cut its earnings forecasts for 2009 and for the group by 9 percent and 15 percent respectively.
Among the scarce risers in Friday's market, marine services group Bourbon (Paris: FR0004548873 - news) added 0.53 or 1.23 percent to 43.59.
On Friday morning, the group announced a 21.4 percent jump in first quarter sales, spurred by sharp increases at both its main divisions, offshore and bulk.
Natixis Securities analysts said offshore figures were better than they had expected, led mainly by Africa, where deep water investments are continuing, along with the revival of mature fields in shallow water such as the Anguille field off Gabon.
Revenues in the bulk division were less than expected but the analysts plan no changes to their estimates, they said in a note to clients, keeping an 'accumulate' rating and 44 euros target.
Hermes International (Paris: FR0000052292 - news) rose 1.40 or 1.49 percent to 95.61, extending its recent gains after the publication Wednesday of solid first quarter sales.
Among bluechips, French utility EDF (Paris: FR0010242511 - news) edged higher midsession, up 0.09 or 0.13 percent at 66.79, buoyed by expectations it is set to launch a sole bid for British Energy Group Plc.
Widespread press reports have claimed that an informal deadline requires bids to be filed by end of business on Friday for the British government's 35 percent stake in BE.
Friday's edition of the Daily Telegraph said EDF is rumoured to be the only bidder expected to table an offer before the end of the deadline, and could bid between 11.7 billion euros and 13 billion euros.
But a British Energy (LSE: BGY.L - news) spokeswoman told Thomson Financial News that the company had never imposed a deadline for bids.
'We are not working to any such deadline and we are not aware of any deadline imposed by the government,' she said.
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