FTSE Lower, Holds Above 6,000 Level

Ivaylo
11 Oct, 2006
New York City

Weak mining stocks were the reason for London benchmark index to slip by mid-day. Kazakh mining group Kazakhmys led the decliners in the sector. Shares in U.K. supermarket chain J Sainsbury fell as well, while luxury clothing brand Burberry gained after second-quarter sales figures and updated investors on prospects. The FTSE 100 index lost 18.8 points, or 0.2% by mid-day.

[R]9:30AM London markets edges lower by mid-day Wednesday on mining stocks.[/R]
The FTSE 100 index in London lost 18.8 points, or 0.2%, to 6,053.9 by mid-day.

Decliners

Kazakh mining group Kazakhmys, sank 1.7%. U.K. supermarket chain J Sainsbury, supermarket operator, lost 1.4% following statenment of the company that it will face much tougher sales growth comparatives in the second half of the year.

Wolseley, declined also 1.7% as dealers reacted positively to comments from Alan Greenspan, former chairman of the US Federal Reserve, on the US housing market.

Investors took profits in Shire, Brambles and Man Group pushing the stocks. Shire eased 3.5% while Brambles and Man, both reported as takeover targets this week, retreated 1.6% to and 1.5% respectively. Other decliners included Rexam losing 1.1%, Tesco shedding 0.7% and 888 Holdings easing 2.3%.

Corus Group lost 2.9% as the Anglo-Dutch group was rumoured to be the target of Tata Steel of India, but Corus has yet to receive a firm proposal.

Advancers
BT Group advanced 1.2% , after reports that the telecommunications group could be a possible merge partner for Deutsche Telekom. BSkyB also gained 1.6% as renewed speculation of a takeover and talk a US mutual fund was looking to buy in the stock.

Carphone Warehouse was the standout stock in mid-caps. The mobile phone retailer swung from early losses after it announced plans to acquire Time Warner AOL internet access business in the UK. Carphone shares were last up 9.3%.

Luxury retailer Burberry advanced 4.3% in the wake of its announcement that, in the second half, it is planning to raise its average retail selling space by around 14%.

[R]7:30AM Asian markets end mixed, Japan lower on banks, Internet shares.[/R]
Asian markets finished mixed on Wednesday. The Nikkei 225 Average finished the day 0.47% lower at 16400.57. stocks closed lower as profit-taking took hold in the wake of worries over North Korea nuclear-bomb test. Investors were optimistic about the upcoming earnings season, though. Internet-related companies, banks and chemical stocks declined. Softbank fell 2%, Mizuho Financial Group recorded a 2% decrease and Shin-Etsu Chemical shed 1.8%.

The Hang Seng Index of Hong Kong ended 0.22% higher at 17862.79. Yue Yuen Industrial led the advancers after it reported strong revenue for September. Cathay Pacific kept on the rise on falling oil prices. South Korea Kospi Index fell 0.22% to 1325.49. The benchmark stock index bounced back from a near 1% dip in intraday trading after it became clear that reports about North Korea conducting a second nuclear test were probably exaggerated.

Shanghai Composite Index closed 0.3% higher at 1790.10, Taipei gained 0.13% to 7006.67, and Australia''s S&P/ASX 200 rose 0.65% to close at 5282.80. In China, China Petroleum & Chemical helped push the benchmark index to a five-year closing high. In Australia, across-the-broad demand boosted the market to its highest level in five months. Promina surged 6.2% on speculation that Suncorp-Metway was planning a takeover offer.

[R]6:30AM European markets were lower Wednesday on profit-booking.[/R]
European stocks were lower by mid morning on Wednesday. The FTSE 100 in London shed 0.2% to 6,062.4, while Frankfurt Xetra Dax slipped 0.4% to 6,094.27, and the CAC 40 in Paris lost 0.6% to 5,279.91.

Advancers

Mediolanum advanced 2.5% as broker Cheuvreux upgraded the Italian bank from underperform from outperform. French insurer CNP Assurances surged 5.1% following its statement that it would raise 700 million euros in debt and the same amount in stock to fund its acquisition of a stake in rival Ecureuil Vie.

Deutsche Telekom gained 1.5% on speculation that Blackstone, the private equity group, and BT, the UK fixed-line operator, were readying for a joint bid. Telecom Italia gained 2.5% after it was reported in the Italian press that Franco-Polish financier Roman Zaleski had bought a stake in the company.

Decliners

Banks were on the decline in early trading. Crédit Agricole, the French bank, fell 2.9% after downgrades from both UBS and ABN Amro. ABN Amro downgraded Agricole from buy to hold.

Banca Intesa lost 0.5%, while Sanpaolo IMI shed 0.1% as investors awaited the outcome of a board meeting at Agricole, which owns an 18% stake in Intesa. Agricole board will discuss the likely merger of Intesa and Sanpaolo.

Other news

The bid of Ryanair for Aer Lingus,met with further resistance as pilots in the former state-owned carrier bought a 2% stake that could help to block the takeover offer.

Oil and gold

Oil prices fell further Wednesday. Light, sweet crude for November delivery dropped 11 cents to $58.41 a barrel in Asian electronic trading on the New York Mercantile Exchange. November Brent crude also slipped 11 cents to $59.23 a barrel on the ICE Futures exchange in London.

Gold rose above $575 an ounce on Wednesday. Spot gold hit an intraday high of $575,20 before slipping to $571,30/572,30 an ounce by 04:00 GMT, down from $573,70/574,70 late in New York on Tuesday.

Currencies

The euro gained slightly against the U.S. currency on Wednesday, and the dollar also lost ground against the Japanese yen after hitting a 10-month high. The euro bought $1.2544 in morning European trading, up from $1.2535 in New York late Tuesday. The British pound strengthened to $1.8552 from $1.8539. The U.S. dollar briefly reached a 10-month high against the Japanese currency on unsubstantiated rumors about a second North Korean nuclear test. It surged to 119.78 yen, but declined to 119.45 yen in Europe, down from 119.76 late Tuesday.

[R]5:00AM Gold retreats under the pressure of weaker oil and stronger dollar.[/R]
Gold for December delivery finished down $6.60 at $576.20 an ounce on the NYME, after having plunged to an intraday low of $573. December silver futures lost 20 cents to end at $11.22 an ounce, while January platinum dipped $19.20 to close at $1,075.70 an ounce and December palladium slipped $1.65 to close at $301.60 an ounce. December copper declined 3.5 cents to close at $3.378 a pound.

Crude oil for November delivery declined $1.44 to end at $58.52 a barrel on the NYME. November gasoline futures ended down 2.81 cents at $1.4668 a gallon and November heating oil shed 4.88 cents to end at $1.6809 a gallon. Natural gas futures for November delivery settled 3.7 cents higher at $6.466 a million British thermal units.

Arabica coffee futures closed slightly lower, after industry buying put an end to an early slide. December coffee finished 0.20 cent lower at $1.0285 a pound. March raw sugar futures settled 0.13 cents higher at 11.61 cents a pound, after trading as high at 11.87 cents a pound.