Euroshares slightly higher midday, Wall St seen flat, miners outperform

LONDON (Thomson Financial) - Europe's leading exchanges were slightly higher in midday trading, as U.S. futures point to a flat open on Wall Street, while a rally among miners offset losses in the banking sector.

At 11:50 a.m., the DJ STOXX 50 was up 9.27 points or 0.29 percent to 3,248.29, while the STOXX 600 rose 0.66 points or 0.20 percent to 326.23.

Looking ahead, Wall Street is expected to open flat, with a key retail inflation report in the spotlight before the bell and with earnings from Electronic Arts and Whole Foods Market set to supply an early focus.

According to spread bettors IG Index, the Dow Jones Industrial Average is expected to open down about 2 points at 12,830. Separately, S&P 500 futures were unchanged at 1,404.70, while Nasdaq 100 futures edged 0.25 point higher at 2,006.25.

Back in Europe, the STOXX 50 and STOXX 600 were also staying close to the flat line, with banks and financials underperforming, while miners gained ground on fresh consolidation hopes.

'We are taking some comfort from data in the U.S. not being as bad as feared, but people are waiting to see where we are going,' strategist Elin Ottosson at Cazenove said.

'We have started to see that Europe is maybe not holding up as well as previously thought,' she added, pointing to disappointing data on euro zone industrial production.

Earlier this morning, the EU statistics agency Eurostat said industrial output in the euro zone fell 0.2 percent in March from February, and was up 2.0 percent year-on-year.

Meanwhile, the DJ STOXX 600 for the basic resource industry rallied 1.95 percent and was led higher by BHP Billiton, which added 3.12 percent.

'One company that seems unwilling to move out of traders' focus appears to be BHP Billiton, as after yesterday's speculation of a higher bid for Rio Tinto, there are now suggestions that the Chinese government is looking to acquire a stake in the stock too and this should lend further support across the mining sector as a whole in the near term,' Matt Buckland, a trader at CMC markets said.

On the other side of the board, banks and financials underperformed, dragged down by shares in Bradford & Bingley, which fell 9.29 percent after it said it will issue a rights issue of around 300 million pounds.

Franco-Belgian financial services group Dexia fell 4 percent after the group posted a sharper-than-expected decline in net profit, due to both mark-to-market adjustments and an unexpected 128 million euros loss on U.S. subsidiary FSA's portfolio of insured U.S. second-lien mortgage bonds.

Staying with financials, BNP Paribas climbed 3.1 percent after its first-quarter net profit beat consensus and as the French bank reassured on its capital levels and crisis exposure.

Natixis Securities stressed that the group's Tier 1 capital ratio remains stable at 7.6 percent, which should assuage fears of a possible capital increase, and provide welcome relief in the wake of Credit Agricole's announcement Tuesday.

In the Netherlands, ING rose 1.7 percent as the Dutch bancassurer's released a mixed bag of first-quarter results but reassured investors with only 55 million euros in subprime-related write-downs.

Also in earnings-related news, EADS rallied 5.4 pecent after a better than expected earnings report.

Analysts at Sal. Oppenheim said, in a first reaction to the results, first-quarter EBIT before goodwill and exceptional items came in much better than both consensus and its own estimates.

'On one hand, first-quarter results are a really positive surprise; on the other hand it could be somewhat disappointing that EADS has not increased its guidance based on these outstanding first-quarter numbers, the analyst said.'

Others also noted short-covering as a reason for today's spike.

Arkema, the French chemicals maker, spiked 11.94 percent after it announced a greater-than-expected 64 percent leap in first quarter net profit, thanks to improving margins at its industrial chemicals and performance products divisions.

In the telecommunications sector, Telekom Austria rallied 3.44 percent after better-than-forecast first-quarter earnings, while Spanish peer Telefonica drifted lower, down 0.2 percent at last check, after its results merely met expectations.

In M&A news, Tele Atlas and TomTom were in the spotlight after the European Commission cleared the acquisition of Tele Atlas by TomTom unconditionally.

'Earlier, one would have expected some remedies would have been required. But this is even better than expected,' Fortis analyst Felix Oberdorfer said.

Shares in Tele Atlas added 2.4 percent, while TomTom slipped 0.4 percent as concerns over the integration process surfaced.

In Germany, Infineon was up 1.5 percent after the Financial Times Deutschland said the chip maker's supervisory board chairman Max Dietrich Kley is considering a merger with Kohlberg Kravis Roberts' NXP Semiconductors. [e-mail] pk/jms/pk/tc/pk/jfr/pk/cmr COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.