STOCKS NEWS EUROPE-Biocompatibles shares up after Astra deal

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Europe [STXNEWS/EU] Real-time Equity News [E] [GB/EQUITY]

09:59GMT 22Dec2008-Biocompatibles shares up after Astra deal

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Biocompatibles BII.L shares rise 13 percent after the company signs a deal with AstraZeneca (AZN.L) to develop its blood glucose controlling GLP-1 analogue to treat diabetes and obesity, with an option to license it.

"We believe that this is an important step for Biocomaptibles as it represents a potentially transformational deal, and starts to quantify the potential for this technology," says Nomura Code analyst Michael King.

For more please click on [BII.L].

Reuters messaging rm://ben.deighton.reuters.com@reuters.net

09:23GMT 22Dec2008-Electrocomponents falls on declining sales

------------------------------------------------------------- Shares in Electrocomponents (ECM.L) slide 6.2 percent after the company says it continues to see demand weakening for its products, with Investec repeating its "sell" rating, saying "the worst is probably still yet to come."

"While the cost reductions provide some protection, sales are declining and with business confidence unlikely, in our view, to rebound materially in the short term, this decline could worsen significantly," Guy Hewitt, an analyst at Investec, says.

Investec says the decline in UK and international sales of around 5 percent between Oct 1 and Dec 19 comes on top of the 3 percent decline reported in October.

The broker currently keeps its forecasts and 120 pence price target.

For more double click on [ID:nBNG385922]

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09:20GMT 22DEC2008-Volkswagen drops on fundamentals as Toyota warns

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Shares in Volkswagen (VOWG.DE) fall 9.1 percent as traders and analysts say the first quarterly loss by Japanese peer Toyota (7203.T) has further worried investors about shares in automakers and Volkswagen's very high price-to-earnings ratio makes it particularly vulnerable.

"Investors still largely see the automaker as extremely over priced and Toyota's quarterly loss and its subsequent profit warning have further shaken up investors confidence in both the industry and especially VW," says a Frankfurt-based trader.

VW has a price-to-earnings ratio compared with estimated 2009 earnings of 24.15, this is 291.13 percent higher than the average on the Dow Jones auto sector .SXAP.

Traders also say VW shares may also be under pressure from a report in Spiegel magazine that it applied for 10 billion euros in credit guarantees from the German government to access cheap financing for its finance arms.

"[There is] no wonder why VW has no problems giving discounts to customers when sales are subsidised by cheap government financing," an analyst says.

In 2008, VW was the single stock among German large caps to make gains, increasing by around 80 percent, while the German DAX-30 .GDAXI lost more than 40 percent.

For more double click on [ID:nT299128]

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08:30GMT 22Dec2008-FTSE Small Cap Index down 0.5 perent early

------------------------------------------------------------- The FTSE Small Cap Index .FTSC falls 0.5 percent in early trade, as the UK market also turns lower as lighter volumes increases volatility, with the FTSE 100 .FTSE down 0.5 percent and the FTSE Mid Caps .FTMC down 0.2 percent.

Electrocomponents (ECM.L) slides 7 percent after the company says it has experienced further weakening in demand, with sales in the UK and internationally declining around 5 percent between Oct 1 and Dec 19.

Taylor Wimpey (TW.L), Britain's largest housebuilder, rises 20 percent on newspaper reports that it is set to strike a deal with its banks in order to buy breathing space to renegotiate its 1.9 billion pound debt mountain.

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08:18GMT 22Dec2008-Europe stocks fall early; Irish banks up on bailout

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European shares fall in early trade, putting them on track for their seventh day of losses in eight, as oils lead losers and volumes are expected to stay thin in Christmas week.

The FTSEurofirst .FTEU3 index of top European shares is down 1.1 percent at 814.74 points. The benchmark has fallen 46 percent this year, hit by a credit crisis that piled up losses at top banks and tipped economies into recession.

Irish banks rise sharply on a decision by the government to inject 5.5 billion euros into them with the state taking majority control of Anglo Irish Bank ANGL.I. Anglo Irish gains 17 percent, while Bank of Ireland (BKIR.I) soars 24 percent and Allied Irish Banks (ALBK.I) jumps 19 percent.

Reuters Messaging rm://sitaraman.shankar.reuters.com@reuters.net

07:46GMT 22Dec2008-Infineon seen up after rescue of Qimonda unit ----------------------------------------------------------------

Shares in German semiconductor manufacturer Infineon (IFXGn.DE) are indicated 22.7 percent higher, according to premarket data from Lang & Schwarz, after its ailing Qimonda QI.N unit ensured its survival for the time being with a 325 million euro loan and the option to tap into federal aid.

"The trading volumes are already quite significant," a local trader says.

Infineon, which owns 77.5 percent in Qimonda and is trying to sell off the unit, agreed on Sunday with the German state of Saxony a rescue package with the help of an unnamed investment bank in Portugal, where Qimonda has its second European plant.

For more double click on [ID:nnLL380236]

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rm://andrea.lentz.reuters.com@reuters.net

07:10GMT 22Dec2008-Europe shares set for 7th day of losses in last eight ------------------------------------------------------------------------

European shares are poised to edge lower, on track for their seventh day of losses in the last eight, as evidence mounts of a severe global downturn. A timid recovery in commodity prices could lend support to recently hammered mining and oil shares, though.

Japan reports the worst ever drop in exports in November, while a Reuters Tankan monthly survey shows business sentiment at its lowest since the survey began more than 10 years ago.

Adding to the grim picture, Toyota Motor Co (7203.T), the world's top carmaker and Japan's industrial champion, slashes its annual profit forecasts on Monday, its second profit warning in less than seven weeks, due to a relentless global slide in car sales and a crippling rise in the yen.

Futures for the DJ Euro Stoxx 50 STXEc1, for Germany's DAX FDXc1 and France's CAC FCEc1 are down 0.2-0.7 percent.

MAJOR MACROECONOMIC DATA: (GMT)

0700 DE GfK index Jan

0745 FR PPI Nov

MAJOR EUROPEAN COMPANIES REPORTING:

none

MAJOR U.S. COMPANIES REPORTING:

Walgreen Q1 (WAG.N)

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