UK Trading Focuses on Commodities, Ireland Debt

Nigel Thomas
15 Nov, 2010
New York City

UK stocks closed higher as commodities recovered. However, traders looked to the meeting of EU ministers tomorrow that is expected to discuss Ireland banking and debt crisis. Irish bonds have declined for thirteen days in a row.

[R]4:30 PM London – UK stocks closed higher as commodities recovered. However, traders looked to the meeting of EU ministers tomorrow that is expected to discuss Ireland banking and debt crisis. Irish bonds have declined for thirteen days in a row.[/R]

UK and European markets closed higher after trading sideways for the most of the session and sovereign debt yields of Ireland, Portugal and Greece were on the rise.

FTSE 100 index increased 0.3% or 16.17 to 5,813.04 and the DAX index added 48.62 to 6,783.23. CAC 40 index gained 1% and the benchmark index in Spain added 1.3%. Indexes in Greece, Sweden and Russia gained at least 0.8%. Portugal index increased 0.4% and Ireland index added 0.6%.

Though the officials in Ireland continue to deny that there is a “crisis” and the government needs external support, but 123jump.com sources within the EU in Brussels and the IMF in Washington, D.C. indicate an emergency bailout plan of at least 50 billion euros is in the works.

The EU-IMF led coalition is expected to offer as much as 100 billion euros in loans and guarantees as early as this week to calm bond markets. EU ministers and officials and ECB officials are scheduled to meet tomorrow in Brussels to hash out the preliminary plan of the bailout.

Various officials in the recent past have estimated the cost of Irish bank bailout near 50 billion euros and central bank governor Patrick Honohan said loan losses to international banks operating Ireland may be at least 85 billion euros.

Stock Movers

Allied Irish Bank Plc increased 3.6% to 0.39 euros and Bank of Ireland declined 2.2% to 40 euro cents.

BHP Billiton Ltd increased nearly 1% after the company abandoned its bid to acquire Potash Corp of Saskatchewan Inc and resumed its stock buyback program.

Hardy Underwriter Bermuda Ltd rejected revised offer from Beazley Plc. Hardy increased 11.5 pence to 310 pence and Bermuda offered 330 pence a share. Separately, Beazley increased 2% after it reported nine-month revenues increased $1.35 billion.

Lonmin Plc gained more than 3% to 1,827 pence after the third largest platinum miner reported annual earnings that exceeded estimates and reinstated its dividend.

The United Kingdom-based platinum producer fiscal year net revenue increased to $1,585 million compared to $1,062 billion for the same period a year ago. Net income $157 million or $70.0 per diluted share compared to net loss of $323 million or $163.7 per diluted share same period a year ago.

Invensys Plc gained nearly 4% after the company chief executive in an interview with the Daily Telegraph said that CSR Corp may be interested in acquiring the company and

Mitsubishi UFJ Financial Group Inc declined 0.3% to 391 yen and the bank reported higher profit and a plan to buy project-finance assets from Royal Bank of Scotland Group Plc for 3.8 billion pounds.

Rolls-Royce declined 1.9% to 600 pence after the aircraft engine maker said as many as 29 turbine engines may have to be replaced or repaired according to the Sydney Morning Herald.

Serco Group Plc increased 1.2% to 569 pence after the outsourcing services provider said that it is on track to meet its financial guidance for the year on strong second half results.

Vodafone Group Plc was ordered by the Supreme Court of India to deposit Rs 2,500 crore in three weeks and offer a guarantee of Rs 8,500 crore in the next eight week as it awaits challenges the tax bill.

The next hearing in the case is scheduled on February 24.