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08:47GMT 28Jan2009
Retail sector rises on Citigroup upgrade

Shares in retail stocks are in demand after Citigroup upgrades its long held sector stance to 'neutral' from 'underperform'.

Home Retail leads the gains, up as much as 6.5 percent, while fellow blue chips Kingfisher rises 5.3 percent, Next Plc is up 4 percent and Marks and Spencer adds 5 percent as Citigroup upgrades its individual recommendations on all four.

Citigroup also upgrades mid cap retailers Kesa Electricals, Sports Direct and DSGi.

'The fade in UK nominal disposable income growth in 2009-2010, as unemployment rises to over 10 percent, is more than offset by a -470 basis point fall in RPI,' said Citigroup in a note.

'We now argue that the sector earnings relative is likely to outperform the equity market in 2009 and move to a neutral sector stance from a long held underweight position.'

Goldman Sachs also raise their price targets on several European retailers in a sector review Wednesday, including Marks and Spencer which it increases by 11 percent to 254.3 pence.

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08:33GMT 28Jan2009
Banks, energy lead European stocks higher

European shares rise 1 percent in early trade, climbing for the third consecutive day, led by banks and energy stocks.

The pan-European FTSEurofirst 300 index of top European shares is up 1.3 percent at 796.13 points.

Banks are the biggest gainers on the index. HSBC, BNP Paribas , UBS and Credit Suisse are up 2.9-4.7 percent.

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08:33GMT 28Jan2009
FTSE Small Caps up 0.3 percent early

The FTSE Small Caps rise 0.3 percent in early trade, underperforming London's blue chip stocks, which rally on the back of positive performance on Wall Street on Tuesday as banks and energy shares lead the index higher.

The FTSE 100 is up 1.2 percent, while the FTSE Mid Caps gain 0.2 percent.

Irish engineering group Kentz climbs 7.6 percent after saying it sees its full-year 2008 results marginally ahead of expectations, and that the outlook for 2009 and 2010 remains positive, prompting Evolution Securities to repeat its 'buy' rating.

Workspace, the British small business landlord, falls 8.9 percent after the company announced late on Tuesday that it was launching an 87.2 million pounds share issue, as debt-laden property companies look to bolster their balance sheets.

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08:30GMT 28Jan2009
Lloyds soars after Citi upgrade

Lloyds Banking Group soars 19.5 pct after Citigroup upgrades the shares to 'buy' from 'hold', saying the risk of nationalisation is fully factored into the share price.

The broker says the current share price seems to reflect 'fears of full nationalisation, something we view as unnecessary and inconsistent with the stated aims of the government'.

Citigroup cuts its target price for Lloyds to 120 pence from 280.

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08:26GMT 28Jan2009
SAP up on solid 2008 numbers, cost cutting announcement

Shares in SAP AG rise 6.7 percent, making it one of the top gainers among German large caps, as its profit beats expectations and software and software-related services revenues are in-line with consensus figures.

Analysts also praise the company's cost-cutting announcement, which will reduce SAP's workforce by 3,000 employees, but say there are points of weakness in the update.

'...the margin scenario and in particular the assumption that 2009 software service related sales will be more or less flat should weigh on the share price today,' says Oliver Finger, analyst at DZ Bank.

'(The results are a) bit difficult to judge,' adds a Frankfurt-based trader.

'(The) cost cutting measures and 2008 numbers (are) positive, but margin scenario outlook and 2009 SSRS base scenario are negative.

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08:17GMT 28Jan2009
Veolia rise on report funds eyeing stake

Shares in French utility group Veolia rise 4.5 percent after French weekly magazine L'Express reports that investment funds are eyeing a stake in the company given its beaten down share price.

Veolia stock plummeted 65 percent in 2008, while the DJ Stoxx utility index dropped 39 percent.

'This is not the first time there are rumors circulating, but it would be hard to think Veolia would sell anywhere near current prices. It is also worth noting that important French institutions own about 20-25 percent of the capital,' one trader said.

Veolia was not immediately available for comment.

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07:18GMT 28Jan2009
Wacker Chemie seen up on good Q4 results

Shares in German chemicals group Wacker Chemie are indicated 2.4 percent higher in pre-bourse trade as the sharpest gainer in Frankfurt's midcap index, boosted by the company's preliminary results for the fourth quarter.

'Compared to other chemicals companies (these are) quite good results,' writes DZ Bank analyst Peter Spengler in a note, with a 'buy' rating on the stock.

The company posts fourth-quarter sales of 1.01 billion euros ($1.33 billion), while EBITDA reaches 120 million euros.

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07:12GMT 28Jan2009
Europe futures point to higher start

European stock index futures point to a higher start, tracking a rally on Wall Street spurred by better-than-feared corporate results that eclipsed grim consumer confidence data.

Futures for the DJ Euro Stoxx 50, Germany's DAX and the French CAC 40 are up between 1.1 and 1.4 percent.

The focus is on a flurry of earnings as well as on the outcome of a U.S. Federal Reserve meeting. The central bank has already slashed interest rates to nearly zero and is looking for other tools to revive economic growth.

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