London Slips on Lack of News

Ivaylo
23 Oct, 2006
New York City

The mood in London is reflecting the lack of any major news so far today, with FTSE 100 now drifting after a decent start. Standard Chartered has climbed to the top of the benchmark index on a report that an investment arm in Dubai may raise its stake in the Asia-focused bank. Crude oil for December delivery fell sending Shell, BP and BG Group into early losses. The FTSE 100 declined 10.6 points, or 0.1%, after initially traded higher in opening exchanges.

[R]9:30AM The FTSE 100 slips on Monday due to lack of major corporate news.[/R]
The FTSE 100 in London was lower by mid-day on Monday. The FTSE 100 declined 10.6 points, or 0.1%, at 6,1446.

Advancers

Standard Chartered led the large-cap advancers, rising 2.6% supported by news that the Dubai state investment company could be looking to raise its stake in the bank to as much as 20%- at a cost of $7 billion.

Prudential gained 0.9% after UBS raised its price target on the life assurer. The broker suggested Prudential could merge with closed life fund consolidator Resolution, up 0.2%.

Decliners

Royal Dutch Shell declined 0.6% after it offered to buy the minority shares in Shell Canada. The oil producer, which already owns 78% of Shell Canada, said the proposal would value the fully diluted minority share capital.

Corus, fell 0.3%, was still the centre of bid speculation following a 5.1 billion pounds offer from Tata Steel of India on Friday. British Energy lost 1.1% ad Credit Suisse cut its price target on the stock.

In the pubs sector, Enterprise Inns fell 1.5% as UBS cut its rating on the chain from buy to neutral. Punch Taverns was also out of favour, down 1.6%, after the same bank cut its rating from neutral to reduce and decreased its price target.

Other news

The US Chemical Safety Board, the federal body charged with investigating the safety record of BP, is understood to have found at least eight previous dangerous incidents at Texas City.

Balfour Beatty and Carillion, the UK construction groups, have won the 363 million pound contract to extend the new East London rail line between Dalston Junction and West Croydon.

[R]7:30AM Asian markets finished mixed, with Japan up and HK and Seoul down.[/R]
Asian markets closed mixed on Monday. The Nikkei 225 Index advanced 0.82% to end at 16788.82, its highest closing since May 11. The benchmark index was boosted by auto makers and electronics companies. Shares of Sony gained 0.84%, while Canon added 1.7%. Shares of Internet and telecommunications conglomerate Softbank rose 3.5%. Lower crude prices weighed on shares of energy producers, sending Inpex Holdings 0.5% lower.

In Hong Kong, the Hang Seng Index closed flat at 18089.85. Shares of China Mobile, the top cellular company in the world by subscribers, shed 0.2%, after reaching a fresh six-year high earlier in the session.

The Korea Composite Stock Price Index ended up 0.1% at 1364.95. Construction stocks advanced after the government unveiled its plan to develop two new residential towns near Seoul, as part of a series of measures to curb surging property prices. Hyundai Engineering & Construction rose 3.1% and GS Engineering & Construction gained 2.3%.

Chinese stocks declined as investors cut holdings on concerns demand will be swamped by a sudden increase in shares, followed by IPO debut of ICBC on Friday. The Shanghai Composite Index lost 1.7% to 1759.39.

Australia S&P ASX/200 finished little changed at 5333.50, Singapore Straits Times Index ended up 0.2% at 2691.61 and Taiwan Weighted Price Index clsoed little changed. Markets in Indonesia, Malaysia, Thailand and New Zealand were closed for holidays.

[R]6:30 AM Falling oil stocks push European markets lower despite tech gains.[/R]
European markets were lower by mid morning on Monday. The FTSE 100 in London shed 0.1% to 6,150.8, while Frankfurt Xetra Dax remained marginally higher at 6,207.22 and the CAC 40 in Paris fell 0.1% to 5,372.91.

Decliners

Oil stocks were lower on Monday. Finnish refiner Neste Oil lost 3.5%, Norsk Hydro was off 2.7% and Repsol of Spain was down 1.3%.

Advancers

Airlines advanced on falling oil prices. German carrier Lufthansa gained 2%, British Airways added 2%. Akzo Nobel, the chemicals and drugs group, gained 1.1% despite a downgrade by ING.

Technology shares also gained. SAP in Germany was one of the early advancers, up 1%. Banks were led higher by Standard Chartered, after reports it was in the running to take over DBS Group of Singapore. Its shares gained 2.6%. French insurer CNP Assurances added 1.8% after its rating was raised by JPMorgan from neutral to overweight.

The steel sector remained in demand after ThyssenKrupp denied weekend press reports that it was considering a counterbid for Corus, the Anglo-Dutch group which has agreed to be purchased by Tata Steel. Shares in Corus gained 0.1% in Amsterdam, while Thyssen climbed 0.2%.

Oil and gold

Oil trade was range-bound on Monday amid market doubts about a decision by OPEC to cut production. December contracts for light sweet crude oil were up 2 cents at $59.35 a barrel on the NYME. Brent crude futures on London ICE exchange shed 1 cent to $59.67.

Gold traded in London at $588.50 per troy ounce, down from $594.30 late Friday.

Currencies

The U.S. dollar was higher against other major currencies in European trading Monday morning. The euro was quoted at $1.2561, down from $1.2620 late Friday in New York. The British pound traded at $1.8744, down from $1.8843. The dollar bought 119.19 Japanese yen, up from 118.65.

[R]5:00 AM Gold prices declined due to falling demand and dropping oil prices.[/R]
December gold dropped $6.10 to end at $596.40 a troy ounce at the NYME. December silver fell 19.5 cents to close at $11.965 an ounce. October platinum ended the session $12.70 lower at $1,082.10 an ounce while December palladium shed $6.90 to finish at $330.50 an ounce. The most-active December copper contract fell 4.75 cents to settle at $3.4620 per pound.

November light, sweet crude oil settled down $1.68 at $56.82 a barrel after earlier falling to $56.55, the least for the front-month contract since Nov. 30. November heating oil lost 4.01 cents to end at $1.6800 a gallon. November unleaded gasoline settled down 2.22 cents at $1.4672 a gallon. November natural gas settled up 10.9 cents at $7.241 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed 20 points higher at $1.0205 a pound. March futures on raw sugar in foreign ports closed up 0.12 cent at 11.71 cents a pound.