January 28, 2008

Auto stocks send bourses higher

European equities rose on Friday, with recently battered carmakers and technology stocks leading the advance after the US passed measures to stimulate the world's biggest economy.

The FTSE Eurofirst 300 was up 1.5 per cent to 1,349.88, Frankfurt's Xetra Dax added 1.9 per cent to 6,950.38, the CAC 40 in Paris added 1.3 per cent to 4,980.10 and London's FTSE 100 added 1.2 per cent to 5,944.0.

Volkswagen rose 4.1 per cent to EU159.40 after the head of its commercial vehicles division said he expected further progress in 2008 after posting double-digit growth in operating profit for 2007.

Porsche, meanwhile, rose 4.4 per cent to EU1,225 after it reported unit sales growth of 19 per cent in its first half, thanks to strong demand for its Cayenne model.

The news gave the rest of the car making sector a lift. Peugeot was 3.8 per cent hogher at EU49.89 and Renault rose 2.7 per cent to EU80. Tyre maker Michelin was 2.4 per cent firmer at EU66.45.

Casino Guichard, the French retailer, gained 5.1 per cent to EU74.31 after announcing like-for-like sales rose 6.5 per cent in the fourth-quarter.

Dutch rival Ahold beat forecasts with a 6.6 per cent increase in fourth-quarter sales, boosting its shares 2.7 per cent to EU8.73.

As investors continued to mull over the details of the EU4.9bn fraud at Société Générale, shares in the French bank rallied 1.6 per cent to EU77. However, BNP Paribas fell 1.6 per cent to EU66.84 and Natixis lost 0.7 per cent to EU11.59 as sentiment toward the wider sector was undermined.

News of success for Carlsberg and Heineken in their pursuit of UK brewer Scottish & Newcastle generated a mixed response. Their recommended offer was priced at 800p per share and valued S&N at £7.8bn. Carlsberg lost 3.9 per cent to DKr536 as traders considered the relative cost of the deal to each company, whilst Heineken rose 1 per cent to EU40.70. Scottish & Newcastle rose 2.4 per cent to 784½p.

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