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11:06GMT 31March2009-UK small caps gain 0.7 percent by midday

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The FTSE Small Cap index gains 0.7 percent in midday deals, faring

worse than both the blue chips and the midcaps, which add 3

percent and 1.6 percent, respectively.

St Ives falls 6 percent after the printer reports a 50 percent drop

in half-yearly pretax profit, hit by volatile demand and pricing pressure, and

slashes its dividend by 65 percent, prompting RBS to cut its forecasts.

Semiconductor designer Cyan rockets nearly 105 percent higher as

investors cheer news of contract wins in China and Europe for the supply of

microcontrollers and software to run automated metering.

Reuters Messaging rm://tricia.wright.reuters.com@reuters.net



11:03GMT 31March2009-Homeserve up; sees FY profit at top end

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Shares in Homeserve jump 7.8 percent after the British home

insurance group delivers a record performance for the year to end-March, saying

its profit would come in at the top end of market forecasts and it expects

similar for next year.

'The shares are currently trading on a full year 2010 price earnings of 9.8

times, extremely low in the context of Homeserve's historical valuation range,

and we expect the statement to be received well,' RBS says in a note.

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11:03GMT 31March2009-St Ives falls after results

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Shares in St Ives slide over 9 percent after the printer reports a

50 percent drop in half-yearly pretax profit, hit by volatile demand and pricing

pressure, and slashes its dividend by 65 percent, prompting RBS to cut its

forecasts.

RBS points out in a note that pretax profit at 6.2 million pounds came in

below its forecast of 7.2 million pounds, while it had assumed a 50 percent cut

in the dividend (though without any guidance from management).

The broker reduces its earnings per share forecast for full-year 2009 to 9.6

pence from 10.5 pence -- with a full-year dividend of 5.25 pence -- and for

full-year 2010, to 10 pence from 10.8 pence.

RBS points out the shares offer a 5.2 times price to earnings ratio and a

10.6 percent yield, which it says looks cheap, and sticks with its 'add'

recommendation, but says 'we believe that there needs to be some recovery in the

market backdrop, or significant industry capacity cuts, before we see a material

rerating'.

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11:00GMT 31March2009-Cineworld up; UK admissions up 11.9 pct

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Shares in Cineworld tick 1.2 percent higher, as UK cineplexes

continue to see the benefits of recession after data released by the Film

Distributors Association (FDA) shows run rate of admissions for the 2 months

ended February 2009 to the UK Box Office now 11.9 percent ahead of last year.

'In times of pressure on consumer spending, Cineworld is well placed, the

shares are not expensive and have a significant (and, we believe, secure)

yield,' Altium Securities, which rates the company as a 'buy', says in a note.

FDA figures show underlying strength of admissions in the UK box office has

strengthened from the 6.6 percent growth in fourth quarter 2008, to +7.7 percent

in January 2009 to +16.4 percent in February.

'What is even more encouraging is that this performance has been achieved

with no major Hollywood blockbuster yet released,' the broker says.

Reuters Messaging rm://david.brett.reuters.com@reuters.net



10:03GMT 31March2009-Cyan rockets on contract wins

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Shares in semiconductor designer Cyan rocket nearly 105 percent

higher as investors cheer news of contract wins in China and Europe for the

supply of microcontrollers and software to run automated metering.

'There are a number of further exciting opportunities, particularly in the

field of RF (radio frequency) enabled microcontrollers, where we are working

closely with Micrel amongst others, and in the field of demand control

products for regions with insufficient electricity generation capacity,' says

chief executive Kenn Lamb.

Edison Investment says in a note: 'These orders, across a range of sectors,

provide evidence of the successful technology positioning of Cyan's

microcontrollers and initial volumes in markets that have substantial

potential.'

Traders point out that investors have been eagerly waiting for the

announcement of the contracts, and highlight that the market is encouraged by

the news of the further opportunities, currently at an early stage of

development.

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09:39GMT 31Mar2009-Shire up on deal with GSK to promote Vyvanse

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Shares in Shire gain 7.7 percent after the blue chip pharmaceutical

company strikes a deal with GlaxoSmithKline, the world's second largest

drugs group, to co-promote its hyperactivity medicine Vyvanse in the United

States.

Charles Stanley says, in its view, Shire's price rise reflects not simply

the first collaborative agreement between the firm and a pharma sector major,

but also 'the possibility that this move could prove to be the precursor to a

full bid for the company in due course.'

The broker says 'it is wary of over-committing to the increased chance of

full take-out at this stage, however, the move should, in our view, go some way

towards reminding investors to look through near-term EPS weakness towards

Shire's attraction...relative to other, larger, pharma sector majors.'

Charles Stanley repeats its 'accumulate' rating on Shire.

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09:26GMT 31March2009-Mouchel dips on restructuring costs

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Shares in Mouchel Group dip 2.2 percent as reorganisational costs

and slowing growth overshadow what analysts say are fairly robust first-half

results.

Numis downgrades the stock to 'reduce' from 'add' reflecting the cost of the

shake-up, while Brewin Dolphin says Mouchel will need a good second-half to meet

full-year expectations.

'Rail's performance appears poor, the slowdown overseas (largely Middle

East) has impacted profitability and working capital, the contract win rate is

noted as being below its target range, and restructuring costs will be taken to

further reduce the cost base,' Brewin Dolphin analyst Mark Fleetwood says.

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09:08GMT 31March2009-Bloomsbury falls; cautious outlook weighs

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Shares in Bloomsbury Publishing, the publisher of JK Rowling's

Harry Potter series, fall 9.8 percent knocked by cautious outlook comments in

the company's full-year results statement.

While Numis Securities points out that the results were good -- with pretax

profit of 11.6 million pounds ahead of the broker's 10.5 million pound estimate

-- it highlights that visibility has decreased, with the company saying unit

sales 'might be lower in the later part of 2009 than in 2008'.

'We remain cautious on UK consumer-facing media and our 'hold'

recommendation balances this with the group's strong balance sheet,' says Numis

in a note.

Reuters Messaging rm://tricia.wright.reuters.com@reuters.net



09:05GMT 31March2009-Morson up on upbeat outlook

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Shares in Morson jump nearly 15 percent after the engineering

support services firm posts a rise in full year pretax profit and says trading

in the current year has started well.

'Given the uncertain economic conditions we are highly impressed by Morson's

ability to continue to grow contract numbers (up 4.5 percent) and win new

business,' says Brewin Dolphin, which maintains a 'buy' rating on the stock.

The company's net debt was lower than forecast due to a strong working

capital performance and lower interest paid, the brokerage adds.

To see Morson's statement please click on

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08:53GMT 31March2009-Barclays rises as trading continues to be strong

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Shares in Barclays rise 4.6 percent after it said on Monday its

trading performance 'continues to be strong' following rejecting an offer to

take part in a British government asset protection scheme (APS).

'This now means virtually a full quarter of strong performance,' say Collins

Stewart analysts in a note.

Collins Stewart analysts add that management have also indicated that APS

help is neither in the interests of shareholders nor customers and satisfies the

FSA stress-tests even without APS help.

'This has two effects: firstly, the bank can continue with its plan to pay a

dividend in 2009. Secondly, it means the bank will remain outside majority state

ownership and without major government control - both positives', says Collins

Stewart.

Reuters Messaging rm://joanne.frearson.reuters.com@reuters.net



08:51GMT 31March2009-D.Boerse gains; BoA-Merrill Lynch upgrades

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Shares in Frankfurt stock exchange operator Deutsche Boerse rise

6.5 percent, supported by Bank of America-Merrill Lynch raising the stock to

'buy' from 'neutral'.

'We believe concerns about the outlook are now priced in and think the

company's gearing into secular growth drivers, world-class franchises

(particularly Eurex) and solid balance sheet will command a re-rating,' the

brokerage writes.

One trader also points to the company's big catch-up potential within the

sector, adding that the end of an owner-cooperation agreement could boost the

stock as it potentially loosens the grip of two investors on the company.

Activist investment funds TCI and Atticus announced the termination of their

'acting in concert' agreement regarding Deutsche Boerse stock in a statement.

LBBW analysts keep their 'buy' rating in the stock in light of the

agreement's ending, saying their see positive triggers for the share in the

short to midterm.

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08:41GMT 31March2009-Novartis gains after cancer drug approval

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Shares in Novartis AG rise 2 percent, versus a 1.8 percent gain in

the DJ Stoxx European health care index, after U.S. regulators approve

its Afinitor medicine for use in advanced kidney cancer and the Swiss drugmaker

says it expects blockbuster sales.

The approval -- and a green light for Ixiaro, a vaccine against Japanese

Encephalitis -- is good news for Novartis, says Vontobel analyst Andrew Weiss.

'Notably Afinitor has now been approved for its first indication. Novartis

is currently conducting a large phase III clinical trial programme to test

Afinitor in most solid tumour types,' Weiss says. 'Positive data published at a

scientific congress would open the way to off-label use in the U.S.'

'Afinitor is a drug that really has the potential to treat many different

cancers,' Joe Jimenez, head of the company's pharmaceuticals business, tells

Reuters. 'This will be a substantial drug for Novartis.'

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08:35GMT 31March2009-Kalahri up; Polo Res ups stake in Extract

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Shares in small cap miner Kalahri Minerals gain 4.6 percent after

Extract Resources, in which Kalahari Minerals has a 38.85

percent stake, announces that Polo Resources increased its holdings in Extract

to 5.7 percent.

'These purchases are testament to the value that Polo Chairman Stephen

Dattels sees in Rossing South. Dattels,' says broker Ambrian.

However, Ambrian analyst Brock Salier says: 'We don't think Polo will prove

to be an eventual buyer, but more likely has seen the value in the asset, and

will certainly demand a hefty takeover premium in the advent of any future

takeover bid.'

Reuters Messaging rm://david.brett.reuters.com@reuters.net



08:33GMT 31March2009-Bellway gains after results

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Shares in Bellway gain 4.2 percent after the housebuilder posts

interim results, which Panmure Gordon says are in line with its expectations,

with the broker keeping its 'hold' rating and lifting its target price to 667

pence from 660 pence.

'Trading conditions remain tough, but with low levels of gearing and a

well-run business model, we believe that the group will exit the current

slowdown in excellent shape,' Panmure says in a note.

The broker says it is encouraging that a 3 pence dividend per share has been

declared -- 'a rarity in the housebuilding sector'.

Reuters Messaging rm://tricia.wright.reuters.com@reuters.net



08:15GMT 31Mar2009-Compass Group up; H1 profit 'well ahead'

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Shares in the world's biggest caterer Compass Group climb 7.3

percent as the company announces its first-half profit is 'well ahead' of

expectations, with Seymour Pierce upping its rating to 'buy' from 'hold'.

Compass says it expects a favourable impact of around 70 million pounds on

operating profit from the movement of key currencies and sees first half growth

in underlying EPS of over 30 percent.

'With cost price pressures abating and organic growth in North America

holding up better than anticipated its is difficult to see why Compass should

trade on a significant discount to the FM sub-sector or to its closest global

peer, Sodexo,' says Seymour Pierce in a note.

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08:02GMT 31Mar2009--Clapham House up; sees FYs inline

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Shares in Clapham House rise 2.3 percent, outperforming a flat small

cap market, as the AIM-listed restaurant group says it expects full-year

figures to be in line with expectations, which 'represents a remarkably good

performance,' says BlueOar Securities analysts.

Clapham House reports the performance is driven by growth in sales from

continuing operations of 15 percent, which beats Altium Securities expectation

of 11.4 percent, and sees the broker up its trading recommendation on Clapham to

'buy' from 'neutral'.

'Whilst there is no new news on the potential disposal of Tootsies we view

today's update as encouraging and the prelims due to be announced on 7 July

could be ahead of our expectations,' adds Altium in a note.

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07:59GMT 31March2009-Innovation higher after contract wins

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Shares in software firm Innovation add nearly 3 percent as the

company receives two multi-million contracts in the motor services sector from a

European carmaker and a fleet management services company.

Altium Securities upgrades its trading recommendation to 'buy' from

'neutral'.

'(The contract wins) provide further evidence that the group continues to

win new business in spite of the various distractions over the past six months,'

Altium says in a note.

The broker says that, given the low valuation and consistently robust

trading, it was not surprised by last week's approach from private equity group

Carlyle, adding it is encouraged that the board did not dismiss it out

of hand.

'We would advocate holding on for the 15 pence bid to materialise,' says

Altium, which keeps its core 'buy' recommendation.

Reuters Messaging rm://tricia.wright.reuters.com@reuters.net



07:55GMT 31March2009-Intercell up 13 pct after FDA approves JE vaccine

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Shares in Austrian biotech Intercell rise as much as 13 percent to

a four-week high of 23.60 euros after the U.S. Food and Drug Administration

approves its Ixiaro vaccine against Japanese encephalitis, Intercell's first

product to hit the drug market.

Delay of the approval, widely expected but long overdue, had slightly

rattled investors this year. The vaccine has estimated peak sales of around 300

million euros ($397 million), according to analysts.

'Intercell's stock has been weak (this year) driven by apprehension for

Ixiaro approval, which was initially expected around year-end 2008, raising

questions over management's credibility,' says Jefferies International analysts

in a note to clients. 'U.S. approval should now be a much needed catalyst for

the stock, in our opinion.'

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($1=.7551 Euro)



07:49GMT 31Mar2009--Pub operators higher after Enterprise update

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Britain's pub operators Punch Taverns and J.D. Wetherspoon

gain 6.6 percent and 1.8 percent respectively after Enterprise Inns, up

3.5 percent, says it has experienced no further decline since its trading update

in January.

Deutsche Bank, which has a 'buy' rating on Enterprise, says in a note: 'We

do not seem to be seeing the scale of downgrades that has characterised the past

two years.'

J.D. Wetherspoon also receives a boost from the broker, which withdrew its

'sell' rating on the stock, upgrading it to 'hold', after the company obtains

financing from Banco Santander, with Deutsche Bank saying 'short term

refinancing risks have significantly abated.'

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07:44GMT 31March2009-Porsche drops; net debt seen as negative

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Shares in European automotive group Porsche reverse early gains

and are down 3.9 percent, as the company's net debt -- which it releases

together with better-than-expected first-half results -- is seen as negative.

'Net debt of 9 billion euros from our point of view is a clear

disappointment, especially after statements by the CFO at the Geneva Motorshow

some weeks ago,' DZ Bank analyst Michael Punzet writes.

He adds that the disappointing net debt figure could put pressure on

Porsche's and Volkswagen's share price, putting 'some question marks

on the whole takeover story'.

Shares in Volkswagen are down 0.14 percent, underperforming Germany's top-30

DAX index, which is up 0.5 percent.

Porsche in January said it had increased its direct stake in VW votes to

over 50 percent.

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07:42GMT 31Mar2009-FTSE Small Caps flat at the open

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The FTSE Small cap index is flat in opening trade, underperforming

the wider UK market as traders see bottom-pickers hunting bargains, with the

FTSE 100 up 1.6 percent and the FTSE 250 up 0.9 percent.

Pub operator Punch Taverns rises 4.5 percent following read across

from a Enterprise Inns' statement, with Deutsche Bank analysts saying,

'We do not seem to be seeing the scale of downgrades that has characterised the

past two years.'

Small cap British printer St Ives sheds 7 percent of its value after

announcing its pretax profit had halved in the the first half of 2009 to 6.2

million pounds from 12.4 million pounds, adding trading conditions continued to

be very challenging.

Reuters Messaging rm://david.brett.reuters.com@reuters.net



07:37GMT 31March2009-Shares trim Monday's losses in broad rally

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European stocks gain ground in early trade, clawing back a portion of the

last two sessions' sharp losses as investor focus turn to a meeting of G20 world

leaders.

British retailer Marks & Spencer surges 9.3 percent after posting a

smaller-than-expected fall in fourth-quarter underlying sales, saying it was

turning around its troubled food business and holding market share in clothing.

The FTSEurofirst 300 index of top European shares is up 1.4 percent

at 718.79 points. The index, which sank 3.9 percent on Monday, is down 14

percent in 2009, hit by the deepening global economic downturn as well as fears

over the health of the banking system.

Reuters Messaging rm://blaise.robinson.reuters.com@reuters.net



07:36GMT 31March2009-M&S leaps on better-than-feared Q4 sales

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Shares in Marks & Spencer leap as much as 10.4 percent to 292 pence

after the British clothing, food and homewares retailer reports a

better-than-feared drop in fourth-quarter underlying sales.

'The combination of improving one- and two-year LFL (like-for-like) sales

trends across both divisions, and unchanged gross margin and cost guidance,

should begin to improve the group's earnings visibility, despite growing input

cost pressures, and start the process of rebuilding investor confidence in M&S,'

Citi analysts say in a research note, forecasting the consensus profit forecast

for 2008-9 will rise 3 percent to 610 million pounds ($872 million).

'However, at this early stage, March 2010 earnings are likely to continue to

assume LFL sales trends more in line with 3Q than today's better 4Q

performance,' they add, keeping a 'hold' rating on the stock.

'Following in the footsteps of Kingfisher in 2008, we think M&S is likely to

be the next large, liquid, asset backed, increasingly international retailer to

be rerated,' JP Morgan analysts write, keeping an 'outperform' rating.

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($1=.6993 Pound)



06:09GMT 31March2009-Stock index futures point to higher open

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European stock index futures point to a higher open, as shares are poised to

reverse some of the previous session's hefty losses while investors' attention

turn to the meeting of the G20 world leaders later in the week.

At 0606 GMT, futures for the Eurostoxx 50, Germany's DAX

and the French CAC 40 are up 0.3-0.5 percent.



MAJOR MACROECONOMIC DATA: (GMT)

0800 DE Unemp rate Mar

0900 EZ HICP flash Mar

1145 US ICSC chain w/e

1255 US Redbook w/e

1300 US C/Shiller Jan

1345 US Chicago PMI Mar

1400 US Consumer confidence Mar



MAJOR EUROPEAN COMPANIES REPORTING:

H1 Porsche

Full Year Fortis

Q4 Neopost SA

Full Year Eurazeo

Interim Bellway

Prelim Cairn Energy

Prelim Kazakhmys



MAJOR U.S. COMPANIES REPORTING:

Q1 Lennar Corporation

Q2 Apollo Group



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Keywords: MARKETS EUROPE STOCKSNEWS =3



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