London Drifts back ahead of U.S. Start

Ivaylo
13 Oct, 2006
New York City

With oils improving and most miners higher, the FTSE 100 is still trading in positive territories, despite losses in the banking sector. A rally for oil prices on Friday helped the energy sector higher, with BP and BG Group at the forefront of the advance. In the volatile mining sector, BHP Billiton and Kazakhmys also notched up considerable advances. At 2:22 pm GMT, the FTSE 100 was 24.60 points, or 0.40% higher, at 6,145.90.

[R]9:30 AM The FTSE 100 retreats from earlier record highs, still trading positive.[/R]
The FTSE 100 in London was 24.60 points, or 0.40% higher, at 6,145.90, at 2:22 pm GMT.

Advancers

A surge for oil prices on Friday supported the energy sector higher, and BP gained 1.8% while BG Group advanced 1.6%. In the volatile mining stocks, BHP Billiton rose 1.7%, while Kazakhmys added 1.7%.

Vodafone had quitted Carphone and chosen rival chain Phones4U as its exclusive retailer for contract customers in the UK. Vodafone shares gained 1.2%.

Decliners

Financial shares declined Bradford & Bingley shed 1.1% as ABN Amro reduced its rating from buy to hold while HBOS lost 0.6% after a downgrade from Goldman Sachs. Barclays fell 0.4% after HSBC downgraded the bank from neutral to underweight. The same broker however, lifted its rating on Lloyds TSB from underweight to neutral and raised its price target from. Lloyds shares gained 2.6%.

Other blue-chip decliners included Alliance & Leicester, down 0.9%, and Amvescap, off 1.7%. Carphone Warehouse fell another 6% after Orange stated it was considering changes to its high street strategy.

Other news

Lloyds TSB is close to its long-awaited first sale of bonds backed by residential mortgages with a 5.62 billion pounds deal that is set to add to an upbeat market for such securitisations in Europe this year.

Evraz, second biggest steelmaker in Russia on Thursday backed away from the idea of large scale mergers and said it had no intererest in linking up with the Anglo-Dutch Corus steel business.

[R]7:30AM Asian markets jumped buoyed by strong U.S. close.[/R]
Asian markets closed higher on Friday. The Nikkei 225 Average in Tokyo finished the day 1.02% higher at 16536.54. Stocks bounced back due to retail shares surging on news of solid earnings, while oil producers advanced on a rally in crude-oil futures.

Aeon gained 3.6%, Daiei moved up 3.7% and Maruetsu advanced 5.8% as Aeon announced it got exclusive negotiation rights to buy a stake in Daiei from Marubeni, which owns a 44.6% voting rights stake in Daiei.

Hong Kong Hang Seng Index rose 0.65% to 17988.86. HSBC Holdings rose 0.6% and China Mobile jumped 1.6%, near a six-year high. South Korea Kospi Index ended 1.26% higher at 1348.60. Leading advancers included state-run Korea Gas which rose 3.6% on positive September liquefied natural gas sales, up 5.6% from a year earlier.

Shanghai Composite Index added 0.4% to close at 1784.66. In China, gains in large-capitalized companies that forecast strong earnings pushed the stock market higher, with China Southern and Shenzhen Development Bank leading advancers.

Taipei advanced 1.21% to 7068.80 and Australia S&P/ASX 200 ended 0.58% higher at 5290.00. Australian stocks closed higher with help for mining and petroleum stocks. BHP Billiton rose 1.6% while Rio Tinto gained 3.1%. Woodside Petroleum rose 1.4%.

[R]6:30AM European markets lower on profit taking in the banking sector.[/R]
European markets were flat-to-lower by mid morning on Friday. The FTSE 100 in London was little changed at 6,122.4, the CAC 40 in Paris was 0.1% lower at 5,355.08 and Frankfurt’s Xetra Dax also remained flat at 6,161.34.

Advancers

Oil stocks were higher as crude prices held above $58 a barrel after a surprise drop in heating oil stocks. Neste Oil, the Finnish refiner, gained 1.5%, while Norsk Hydro rose 1.4%. Michelin, the French tyre maker, gained 2.4% after Deutsche Bank raised its price target for the company.

Decliners

Banks dipped in early trading. Intesa fell 2.1%, Sanpaolo shed 2.3%, while Santander lost 0.7%. Credit Suisse downgraded both Intesa and Sanpaolo from overweight to neutral, telling investors to lock in profits.

French cosmetics group L''Oreal shares slipped 2.9% after the company said that sales invoiced in North America have been held back by turbulence in the distribution sector.

Oil and gold

Oil prices gained Friday on news that U.S. heating oil inventories dropped and that Norway ordered production shut down at two offshore platforms, sharply reducing flows from the world''s third-largest oil exporter. Light, sweet crude oil for November delivery gained 33 cents to $58.19 a barrel on the NYME.

Gold opened Friday at a bid price of $577.85 a troy ounce, up from $577.03 late Thursday.

Currencies

Against the euro, the U.S. dollar traded at $1.2551, from $1.2556 late yesterday. It was also at 119.41 yen, from 119.38.

[R]5:30AM Gold and silver futures rose slightly on Thursday, as oil rebounded.[/R]
December gold advanced $3.80 to $580.30 a troy ounce on the NYME as well as December silver which added 5 cents to $11.38 an ounce. January platinum gained $1.80 to $1,074.60 an ounce but December palladium declined $1.05 to $307.90 an ounce. The most-active December copper contract fell 2.35 cents to settle at $3.3865 per pound.

The November crude oil contract rose 27 cents to end at $57.86 a barrel after hitting a 10-month low of $57.22 earlier in the session. The November heating oil contract settled up 1.57 cents at $1.6877 a gallon and November gasoline closed largely steady at $1.4509 a gallon. October natural gas settled down 36.8 cents at $5.782 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures ended up 0.25 cent at $1.0330 a pound. Futures on raw sugar in foreign ports for March advanced 0.4 cent to finish at 11.13 cents a pound.