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Support of ailing EU banks lifting the stock market in early trading

Thursday, 06 October 2011
Equity trading in Stockholm pulled up in Thursday's early trading, in a development that overshadowed the leading index. The mood among the European investors was raised by a proposal from the European Commission that member countries should implement a coordinated recapitalization of banks in the EU.

At about 11:00 hours Swedish time, the index of leading stock market trading shares, the  OMXS30 was up 1.8 percent to at 916. Turnover on the Stockholm Stock Exchange was Skr3.3 billion. The combined turnover, including Burgundy, Chi-X, Turquoise and Bats, amounted to Skr4.7 billion.

The Swedish krona strengthened against the euro and dollar. The Swedish ten-year bond yield was up 7 basis points to 1.80 percent.

The upturn was broad with commodity-related companies well represented high on the winner list, although Lundin Petroleum backed after the buoyant past few days that it rallied. Today it was trading on the minus side in the early trading.

The major stock markets in Europe showed major gains in the morning. The regional index Euro Stoxx 50 was up 2.3 percent. Frankfurt Stock Exchange's DAX rose 2.4 percent, and the Paris Stock Exchange's CAC 40 was up 2.4 percent. In London the FTSE 100 was 1.7 percent higher.

Banking and finance, insurance and commodity-related was again the strongest sectors.
Thursday's main item on the agenda is the European Central Bank, ECB, interest rate statement at 13.45, followed by press conference by ECB president Jean-Claude Trichet. According to Bloomberg News analyst survey expects the majority of analysts that the ECB will leave the key rates unchanged at 1.50 percent. Of the 52 estimates in the survey track, eleven want a policy rate cut by between 25 and 50 points.

EU Commission proposes that member countries should implement a coordinated recapitalization of banks in the EU.
The EU Commission President, Jose Manuel Barroso, said on Thursday, according to Reuters.
"We are now proposing that member states carry out coordinated action to recapitalize banks," he said in an interview posted on YouTube and added that banks can get rid of the toxic assets that they may have.

On Thursday morning, the Netherlands reported an inflation rate of 2.7 percent in September, compared with the expected 2.6 percent, according to Bloomberg News.

Skistar reported on Thursday morning, a net sales of Skr 36 million and a net loss of Skr147 million for the fourth quarter of the split fiscal year. Reservation situation before the company's winter season 2011/2012 at the end of the period, was 5 percent lower than at the corresponding  time last year.

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Skistar describes the bookings so far for this year's ski season as okay, but it has hopes for an improvement after a positive reservation input in recent weeks.
"We hope that the trend in recent weeks will continue, but we know what is happening outside the window and it is clear that it affects consumer spending, "said the ski operator's CEO Mats Ĺrjes in a comment to the Swedish news agency,  Direkt.
Skistar shares dropped 1.1 percent to Skr92:25 in early trading.

Swedish Match has a sell recommendation, this time from Société Générale, which initiated coverage of the company. The target price was set at Skr200. Swedish Match launched the trading day with a decline of 0.6 percent to Skr 223:00.

SKF has been seen reduction in the recommendation from S & P Equity Research, for sales and the target price is cut by 40 percent to Skr120.
The lowering of the recommendation was, however, having less impact on a general upturn in the engineering sector. SKF B share rose 1.9 percent to Skr 128:40.

While Handelsbanken and JP Morgan have revised the engineering sector, which resulted in lower recommendations for Assa Abloy, Hexagon and Sandvik. JP Morgan is content to lower the target price for SKF, Sandvik and Atlas Copco.

Assa Abloy rose 0.1 percent to Skr 141:20, Hexagon was up 2.6 percent at Skr86:05 and Sandvik advanced 2.9 percent to Skr 77:10.

Pareto Ohman contributes with a review of real estate companies, with lowered recommendations for Hufvudstaden, to keep from buying, and Kungsleden, which also cut to hold from buy.
Kungsleden rose 1.1 percent to Skr45:30 and Hufvudstaden A was up 1.6 percent to Skr 67:25

Among the smaller listed companies Net Insight rose 4.5 percent to Skr2.53, after having fallen 19.2 percent on Wednesday. As on Tuesday UBS dominated the buying side, while SEB Enskilda emerged as the largest on the selling side.
By Scancomark.se Team

 



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