Posted on 10/10/2005 5:52:34 AM PDT by ex-Texan
FRANKFURT (AFX) - Shares were higher in midday trade, amid US gains on Friday and as Gerhard Schroeder's Social Democrats announced they have agreed that conservative Christian Democrat leader Angela Merkel should replace him as chancellor at the head of a coalition government, dealers said.
At 11.40 am, the DAX 30 index was at a session high, up 49.36 points or 0.99 pct at 5,057.13, having moved between 5,027.28-5,057.13 so far this session.
The MDAX was at 7,023.10, up 52.24 points or 0.75 pct, while the TecDAX
was at 603.32, up 3.64 points or 0.61 pct.
The DAX future was at 5,075.00, up 53.00 points or 1.06 pct, while the bund future was at 122.37, down 0.03.
The euro last traded at 1.2130 usd, compared to 1.2144 in early London trade.
'The sentiment towards a grand coalition is increasingly positive,' market strategists at First Berlin said in a morning note. 'Consequently, we anticipate a rally on the announcement of the new political framework expected Monday.'
They added that in the week ahead, they see key levels for the DAX 30 index of 4,990 to the downside and 5,060 to the upside.
'A breach of these levels on a daily closing basis will likely determine the direction for the coming sessions,' said the strategists.
Allianz was the best performer, adding 2.58 eur or 2.30 pct to 114.75, for chart-technical reasons.
'The stock looks good from a chart-technical point of view and a share price level just above 114 eur is a clear break-out signal,' one dealer said.
Adidas-Salomon posted gains for technical reasons too, up 2.78 at 152.40.
Continental rose 1.74 to 69.84, as Morgan Stanley explored various factors that could justify a 100 eur price target on the stock.
The broker argued that reaching breakeven at the North American tyre business, achieving rising penetration of ESP (Electronic Stability Programme)
in North America, and optimising Continental's balance sheet would add some 2 eur to its EPS forecasts and lead to a 25 eur higher fair value estimate.
Morgan Stanley currently has an 'overweight' rating and a 75 eur price target on the issue.
Deutsche Boerse gained 1.22 to 79.11, ahead of its supervisory board meeting today, in which former SWX Swiss Exchange chairman Reto Francioni is expected to be appointed new CEO.
Deutsche Boerse will also discuss the future of the US operations of its Eurex derivatives joint venture at the meeting, its chairman Kurt Viermetz told the Boersen-Zeitung on Saturday.
Deutsche Bank climbed 0.84 to 77.83, as Citigroup hiked its price target on the stock to 90 eur from 80 and reiterated its 'buy' rating in a note on the European banking sector.
SAP was up 1.10 at 142.52 after Merrill Lynch hiked its price target on the stock to 165 eur from 150 and reiterated its 'buy' recommendation on the shares.
Bayer added 0.26 to 30.31, following a newspaper report that said it expects to receive US Food and Drug Administration (FDA) approval for its Sorafenib kidney cancer drug by January, earlier than the company had previously expected.
TUI, up 0.02 eur or 0.11 pct at 17.48, was the worst performer on a DAX with no fallers.
Over on the MDAX, Merck jumped 2.14 eur or 3.07 pct to 71.75, as Deutsche Bank raised its price target on the issue to 83 eur from 75 and reiterated its 'buy' rating.
'We expect Merck to be the major beneficiary of the expected 50 pct increase in Liquid Crystal demand next year,' the broker said in a note to clients, adding that market concerns over liquid crystal price pressure is overdone.
Meanwhile, Pfleiderer lost 0.43 eur or 2.78 pct to 15.05.
Douglas rose 0.27 to 31.47, as the market mulled the company's full-year results, which led Merrill Lynch to reiterate its 'buy' rating on the stock.
'All in all, Douglas performed broadly in line with our expectations, reinforcing our views that the company is as reliable as ever when it comes to delivering on its promises ...,' Merrill Lynch said in a note to clients.
The broker has a 35 eur price target on the stock.
On the TecDAX, Morphosys soared 2.01 eur or 5.23 pct to 40.45, after announcing it will expand its collaboration with Schering in order to include an additional three therapeutic antibody programmes.
Tele Atlas fell 1.85 eur or 6.73 pct to 25.65.
Perhaps the German people have awakened in time to save themselves.
Bundeskazlerin = Bundeskanzlerin. Entschuldingungen.
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