Europe shares pare losses; M&A counters credit woes

(Reuters) - European shares pared losses in mid-morning trade on Monday as merger and acquisition news helped distract investors from credit market worries.

At 0940 GMT, the FTSEurofirst 300 of top European shares was down 0.6 percent at 1,507.81 points after earlier falling as low as 1,500.39.


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Stocks Retreat in Europe; UBS, BNP, Philips, BHP, Lafarge Lead the Drop

(Bloomberg) -- European stocks fell, following
declines in Asia and the U.S., on mounting concern that losses in
the U.S. mortgage market will erode economic growth and raise
financing costs for companies.

UBS AG and BNP Paribas SA led a drop by financial shares.
Royal Philips Electronics NV and Lafarge SA decreased as the
dollar traded near a record low against the euro. BHP Billiton
Ltd. and Rio Tinto Group slipped after copper fell in Shanghai.


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European Stocks May Decline; UBS, ING, Philips, BHP Billiton Might Drop

(Bloomberg) -- European stocks may fall, following
declines in Asia and the U.S., as concern mounts that losses in
the U.S. mortgage market will erode economic growth and raise
financing costs for companies.

UBS AG and ING Groep NV may lead financial stocks lower.
U.S.-traded shares of Royal Philips Electronics NV and Nokia Oyj
dropped as the dollar traded near a record low against the euro.
BHP Billiton Ltd. and Rio Tinto Group declined in Australian
trading after copper fell in Shanghai.


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Poland's Zloty Posts Weekly Gain as Investors' Appetite for Risk Returns

(Bloomberg) -- The Polish zloty posted a weekly gain,
advancing to an eight-day high against the euro, as investors
regained their appetite for emerging-market assets.

Investors resumed buying stocks and higher-yielding
currencies such as the zloty, the Turkish lira and the South
African rand as concern abated that losses on U.S. subprime
mortgages would slow global economic growth. The risk of holding
European corporate debt fell for the first week in seven.


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Oil eases from record high close, awaits U.S. data

(Reuters) - After seven consecutive weeks of gains, U.S. crude is testing last year's all-time intra-day high of $78.40 a barrel, fuelled by fears that OPEC's reluctance to lift production will lead to a sharp pre-winter decline in supplies.




European benchmark Brent slid 36 cents to $76.69 a barrel, having recently lagged U.S. gains spurred by a steady decline in stocks at the Cushing, Oklahoma, delivery point for the New York Mercantile Exchange contract.


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SPX Corp to buy a Johnson Controls diagnostic unit

(Reuters) - BOSTON, July 31 - Diversified manufacturer SPX Corp. said on Tuesday it had reached a deal to buy the European automotive diagnostics division of Johnson Controls Inc. for 32 million euros .



Johnson's automotive diagnostics unit last year generated about $80 million in revenue. SPX said it expects the deal to close in the third quarter of 2007.


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SAP says Germany head resigns for personal reasons

(Reuters) - In the interim, Ferri Abolhassan, executive vice president
for SAP large enterprise business in Europe, the Middle East and
Africa, will run the German operations.




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Trichet, Poised to Raise Interest Rates, Follows in Bundesbank Footsteps

(Bloomberg) -- The European Central Bank might be
run by a Frenchman; its heart and soul belong to Germany's
Bundesbank.

ECB President Jean-Claude Trichet faces political pressure
to stop raising interest rates, and some of his own policy
makers query the extent of the inflation threat in Europe.
Still, investors are betting he'll push borrowing costs higher,
upholding the legacy of Germany's central bank, which celebrates
its 50th anniversary tomorrow.


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Euro May Extened Losses to 159.88 Yen on Technical Charts, MUFG Predicts

(Bloomberg) -- The euro may fall to a three-month
low of 159.88 yen in the next few days, provided it fails to hold
above 163.29, said Masashi Hashimoto, currency analyst at Bank of
Tokyo-Mitsubishi UFJ Ltd. in Tokyo.

Resistance at 163.29 is the common European currency's
average price over the past five days. Support at 159.88 is a 50
percent retracement of the euro's rise from a March 6 low of
150.76 to a record high of 168.99 on July 23, according to a
series of numbers known as the Fibonacci sequence. Moving average
convergence/divergence, a momentum indicator, also suggests
further declines.


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UPDATE 1-US corporate bond market losing dominance - NY Fed

(Reuters) - Corporate bond issuance in the Eurobond market exceeded
those of the U.S. bond market in 2006.




U.S issuers followed the trend by relying more on the
Eurobond market for funding, a study titled "Evaluating the
Relative Strength of the U.S. Capital Markets" showed.


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European Carbon Emissions Permits Climb After Rise in German Power Prices

(Bloomberg) -- European Union carbon dioxide
permits rose to the highest in almost three weeks, following
rising energy prices including German electricity.

Permits for December 2008 gained for a fifth day, climbing
as much as 50 cents, or 2.5 percent, to 20.80 euros ($28.43) a
metric ton on the European Climate Exchange in Amsterdam. They
traded at 20.65 euros at 3:23 p.m. local time.


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Morgan Stanley, Banks Agree on Loan Derivative Trading Rules, ISDA Says

(Bloomberg) -- Banks including Morgan Stanley,
JPMorgan Chase & Co. and Goldman Sachs Group Inc. published
rules for credit-default swaps on loans in Europe, ending an
impasse that reduced trading for the past nine months.

The contracts, used to speculate on the ability of
companies to repay their loans, will follow U.S. guidelines and
transfer to new debt when a company refinances, the
International Swaps & Derivatives Association said today in an
e-mailed statement. The buyer and seller can still agree to
follow current rules in Europe instead, and allow the loan
credit-default swaps to be canceled when the reference company
refinances, ISDA said.


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Europe Government Bonds Slide on Speculation ECB to Indicate Higher Rates

(Bloomberg) -- European bonds fell on speculation
the European Central Bank will this week reiterate its preference
for higher interest rates as economic growth in the region
maintains momentum.

Ten-year German bunds, Europe's benchmark, declined for the
first day in five on speculation policy makers will leave rates
at a six-year high of 4 percent at their Aug. 3 meeting and
signal increases are likely by year-end. Debt also slid on views
the longest weekly rally since March last week drove yields too
low for the outlook for borrowing costs.


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European Mining Stocks Advance, Led by BHP Billiton, Rio; IKB Tumbles

(Bloomberg) -- European mining stocks rose, led by
BHP Billiton Ltd. and Rio Tinto Group, as copper increased.

IKB Deutsche Industriebank AG tumbled 18 percent after the
German lender that invested in U.S. subprime mortgages said
profit will be ``significantly'' lower than forecast.


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Gaz de France First-Half Sales Fall 11 Percent on Drop in Heating Demand

(Bloomberg) -- Gaz de France SA's second-quarter sales
fell 7.3 percent as warm weather carried over from the winter and
reduced demand for heating. The company maintained its outlook for
this year.

Second-quarter sales at the company, the operator of Europe's
biggest natural-gas network, fell to 4.73 billion euros ($6.49
billion) from 5.1 billion euros a year earlier. The figure was
calculated by Bloomberg News by deducting first-quarter sales from
first-half sales, which the Paris-based company reported today.


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Hungary's Forint Posts Weekly Drop Versus Euro as Investors Avoid Risk

(Bloomberg) -- The Hungarian forint posted its
biggest weekly drop against the euro in 10 months as tumbling
global stocks and concern about U.S. subprime mortgage losses
prompted investors to shun emerging markets.

The forint was the worst performer against the euro over the
past five days, sliding more than 2 percent, as the NTX Index of
stocks in central Europe's 30 largest companies declined the most
in a week since March. Investors reversed trades where they'd
bought the forint to take advantage of Hungary's 7.75 percent
interest rate, also sending the currency tumbling.


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EU says Intel tried to squeeze out Advanced Micro

(Reuters) - The two companies make all the chips at the processing heart of the world's one billion personal computers and servers, but Intel has about 80 percent of the business.




The European Commission, in its latest antitrust case to involve a technology giant, alleged Intel broke EU law "with the aim of excluding its main rival, AMD, from the x86 computer processing units market." X86 is the designation for the chips.


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European Government Bonds Reverse Gains After Germany's Inflation Reports

(Bloomberg) -- European government bonds reversed
earlier gains after reports showed inflation quickened in
Germany, stoking speculation the European Central Bank will raise
interest rates further.

Bunds fell for the first day in four after data showed
consumer-price inflation accelerated across Europe's largest
economy in July, fueled by rising holiday costs and energy
prices. Government debt had gained earlier as a slump in global
stocks and U.S. subprime losses prompted investors to buy the
safest assets.


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German July Business Confidence Declines for Second Month as Economy Cools

(Bloomberg) -- German business confidence fell for a
second month in July, indicating Europe's largest economy is
losing momentum.

The sentiment index, based on responses from 7,000
executives, fell to 106.4 from 107 in June, the Munich-based Ifo
research institute said today. That's in line with the median
estimate of economists in a Bloomberg News survey. The index
reached an all-time high of 108.7 in December.


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European Stocks Gain on Earnings; ABB, EADS, Lonza Group, DSM Lead Advance

(Bloomberg) -- European stocks rose for the first time
in three days as companies from ABB Ltd., the world's largest
builder of electricity networks, to European Aeronautic Defence &
Space Co. reported earnings that beat analysts' estimates.

``We're seeing a lot of earnings hitting or exceeding
estimates,'' said Peter Jarvis, the London-based director of
European equities at F&C Asset Management, which oversees about
$230 billion. ``Overall, the corporate picture looks pretty good.''


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