Euroshares flat as EADS, banks lower; offsetting Dow gains, tech strength

Euroshares flat as EADS, banks lower; offsetting Dow gains, tech strength

	Published : Wed, 17 Jan 2007 11:26 By : Agencies Print this Story

LONDON (AFX) - Leading European exchanges were flat mid morning after a mixed session overnight on Wall Street, with the tech sector gaining after good news from Intel and Sony Ericsson but downgrades weighing on a number of financials, dealers said.

At 09.59, the STOXX 50 was up 0.02 points at 3767.89 and the ST0XX 600 was 0.41 points higher at 372.43.

EADS fell 2.37 pct after it warned its Airbus unit will post a full year EBIT loss for 2006, as charges related to the A380 project may be higher than previously expected. While it said this will be offset by EBIT gains in other divisions analysts moved to cut their forecasts.

And shares in Electrical retailer DSG fell 7.85 pct as the market digested a mixed Christmas trading update, with weaker group margins and 'disappointing' sales in Currys offsetting an otherwise 'broadly in-line' set of figures, dealers said.

Among financials, Royal Bank of Scotland fell 0.84 pct after they were cut to 'neutral' from 'buy' at UBS, while Lloyds TSB -- down 1.69 pct -- was cut to are duce' from 'neutral'.

Shares in Alliance & Leicester were 1.41 pct lower in early deals after Merrill Lynch downgraded the stock to 'sell' from 'neutral'.

Aviva shares -- down 0.3 pct -- were cut to 'equal-weight' at Lehman Brothers but shares in Legal & General -- up 0.16 pct -- were upgraded to 'equal-weight' by the US broker.

Shares in Capitalia fell 1.64 pct after it was downgraded to 'underperform' from 'outperform' at CA Cheuvreux. Bankinter -- up 0.08 pct -- upgraded to 'hold' vs 'sell' at Citigroup and Bank Sarasin -- up 1.83 pct -- was upgraded to 'outperform' from 'neutral' by Credit Suisse, while BBVA -- up 0.21 pct -- was raised to 'buy' from 'hold' at Deutsche Bank.

But the tech sector was higher -- despite a disappointing update from Intel overnight -- thanks to better than expected numbers from ASML and Sony Ericsson.

ASML added 5.05 pct after it reported a net profit in the fourth quarter of 206 mln eur, above the 184 mln-186.3 mln eur forecast by analysts, while sales were 1.068 bln eur, well above the 1.015 bln consensus.

ABN Amro upgraded ASML to 'buy' from 'sell'.

Ericsson added 0.68 pct after Sony Ericsson reported a solid set of fourth quarter results,.

'An improving mix has driven margins higher and helped to offset industry weakness in average selling price ASPs,' one dealer at a major European brokerage said.

He said the numbers add 2 pct to Ericsson's bottom line.

And Nokia added 0.85 pct.

The chemicals sector was in focus amid talk that Akzo Nobel -- up 0.1 pct -- could be interested in buying Rhodia -- up 4.12 pct.

Clariant was 2.02 pct higher as talk circulated it is planning a merger with Lanxess -- up 2.55 pct.

And Bayer added 2.19 pct. Morgan Stanley increased its target price to 50 eur from 43.20 eur

Elsewhere, shares in SEB SA rose 5.22 pct after the kitchen appliance maker reported a higher than expected rise in full year sales.

deborah.hyde@afxnews.com

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