FTSE Gains on M&A

Ivaylo
04 Oct, 2006
New York City

London benchmark index remained higher this afternoon, but futures pointing to losses on Wall Street later, weak UK power stocks and a gloomy mining sector have lowered the FTSE 100 from earlier highs. Northgate Information Solutions topped the list of mid-cap advancers as it confirmed takeover approaches. The FTSE 100 was up 15.80 points, or 0.27% at 5,952.90 at 2:13 pm also supported by a continued fall in the oil price.

[R]9:30AM Merger activities keeps FTSE 100 higher, mining, commodities fall.[/R]
The FTSE 100 in London advanced 15.80 points, or 0.27% at 5,952.90 at 2:13 pm.

In focus

Northgate Information Solutions led the list of mid-cap advancers as the IT services and software company confirmed a report in the Financial Times that it had received a number of takeover approaches and was in talks over a possible offer.

Advancers

Tate & Lyle led the blue-chip gainers, up 5.8%, as the sugar group was upgraded from neutral to buy by Merrill Lynch on increased purchasing power. Barclays gained 2.2% on reports that Citigroup was considering a bid for the bank.

Vodafone also advanced 3.35% after its briefing on its Spanish and Italian operations yesterday, which attendants described as being upbeat. British Airways rose 1.38% as oil shares are among the winners with the US November crude price falling below $59 per barrel. Electro-optic group Gooch and Housego gained 4.25% and drug group SkyePharma gained 0.95%.

Decliners

Royal Dutch Shell lost 0.8%, BG Group fell 1.4% and Cairn Energy traded 2.9% lower at £17.83. BP, which issued a mostly benign trading statement this morning, lost 0.7%.

PartyGaming continued its downward spiral, off a further 5.5%, after it announced on Tuesday that it had cancelled its interim dividend.

Anglo American, Lonmin, and Kazakhmys traded in the red as commodity prices fell. Anglo American dropped 2.19%, Lonmin sank 1.21%, and Kazakhmys slipped 2.17%.

Other news

UK house prices rose by 1% in September, but activity may have reached a plateau, Halifax reported on Wednesday.

Photographic retailer Jessops has strengthened its presence in the north of Britain with the acquisition of Scottish chain MacKinnons of Dyce.

[R]7:30AM Asian markets fell Wednesday on N. Korea nuclear test plans.[/R]
Asain stocks were mostly lower on Wednesday. The Nikkei 225 Index finished down 0.98% at 16082.55 after erasing morning gains. Sumitomo Metal Mining shed 5.29% and Mitsui & Co. sank 5.53%. Electronics shares also moved lower, with Sony slipping 3.26% following its announcement on Tuesday that its next-generation Blu-ray DVD recorders would would be released later than those of rival Matsushita Electric Industrial, which markets electronic products under the Panasonic and Technics brand names.

Kospi in South Korea closed 1.6% lower at 1352.00 after dropping to a low of 1345.83 earlier in the afternoon. S&P/ASX 200 in Australia gave up 0.8% as slipping oil and metal prices took a toll on energy and mining stocks. Shares of Woodside Petroleum were off by 2.9 % and BHP Billiton declined 4.6%. Taiex index in Taiwan fell 1.2%. Chipmaker Taiwan Semiconductor Manufacturing dipped 2.5% amid a broad decline in tech shares.

Hang Seng Index in Hong Kong bucked the trend and advanced 0.13% to 17629.21. Airline stocks roseon lower oil prices. Cathay Pacific shares gained 1.3% and Air China rose 2.6%. But Hong Kong-listed mainland oil producer Cnooc shed 3.6%, also on the crude moves.

[R]6:30AM European stocks were mostly higher Wednesday on bank shares.[/R]
European markets were higher by mid-morning on Wednesday. The FTSE 100 in London gained 0.1% to 5,939.4, Frankfurt Xetra Dax added 0.3% to 6,010.55 and in Paris, the CAC 40 was 0.2% higher at 5,227.92.

In focus

Oil company British Petrolium declined in London after reporting expected lower margins while EADS announced late Tuesday that it will push back the already-delayed delivery schedule of A380 superjumbo jets by up to another year.

Advancers

Banks advanced after the US bank Citigroup was reported to be setting out on an acquisition course. Among those identified as targets, BNP Paribas of France gained 1.6%, Société Générale added 1.6% and BBVA of Spain gained 1.5%.

Companies that benefited from the decline in oil prices included British Airways with its shares up 2.4%, and cruise operator Carnival, which gained 1.4%. Chipmaker Infineon Technologies was also up 2.4% following an upgrade to buy from neutral from Goldman Sachs.

Decliners

EADS led the decliners. The aerospace group fell 6.7% after it announced further delays to its troubled Airbus A380 superjumbo, prompting top buyer Emirates to put its purchases under review.

DaimlerChrysler shares slipped 0.8%. The automaker last night also posted a narrower-than-expected 2.3% monthly drop in U.S. auto sales on strength from its Mercedes. Mining stocks moved lower on commodity exchanges. BHP Billiton lost 3.4% and Rio Tinto shed 3.3%.

Oil and gold

Oil prices fell for a third day Wednesday. Light sweet crude oil for November delivery fell 18 cents to $58.50 a barrel in electronic trading on the New York Mercantile Exchange. November Brent crude fell 41 cents to $58.02 at London''s ICE Futures exchange. Gold traded in London at $578.50, down from $581.80 late Monday.

Currencies

The U.S. dollar advanced against other major currencies in European trading Wednesday morning. The euro traded at $1.2696, down from $1.2727 late Tuesday in New York. The British pound traded at $1.8824, down from $1.8872. The dollar bought 118.05 Japanese yen, up from 117.89.

[R]5:00AM Gold and silver futures fell Tuesday due to the crude oil price plunge.[/R]
The most-active December gold sank $21.80 at $581.50 an ounce and the most-active December silver contract slipped to $11.02 an ounce, its lowest level since Sept. 21. The contract closed at $11.045, down 59.5 cents. January platinum moved dowwn $29.30 to end at $1,129.90 an ounce while December palladium settled $7.70 lower at $306.45 an ounce. The December copper contract fell 14.70 cents to finish at $3.2825 per pound.

The front-month November crude oil contract lost $2.35 to $58.68 a barrel, its lowest close since Feb. 16. November heating oil declined 4.79 cents to $1.6539 a gallon and November unleaded gasoline was off 4.567 cents to $1.455 a gallon, also a seven-month low. October natural gas advanced 11.6 cents at $5.759 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed up 0.70 cent at $1.0425 a pound and March gained 0.70 cent to $1.0810. Futures on raw sugar in foreign ports for March sagged 0.43 cent to end at 10.89 cents a pound and May lost 0.38 cent to 11.12 cents.