Another Quiet Afternoon for FTSE

Ivaylo
24 Oct, 2006
New York City

Nerves before the busy reporting season had London large-cap stocks struggling by the afternoon, as weak metal prices led the miners down. Trading volumes were light, as they had been in the previous session.The muted performance was despite the U.S. market hitting an all-time high overnight. The FTSE 100 shed 0.4 points to trade at 6,165.9 by mid-day.

[R]9:30AM London declines, struggles with lower metal prices.[/R]
The FTSE 100 in London fell 0.4 points to trade at 6,165.9 by mid-day.

Advancers

Shares in BP, the largest company in Britain, rose 1% after it reported third-quarter replacement cost profit slightly above expectations, up 58%. Tate & Lyle firmed 2% after Morgan Stanley raised its recommendation on the sweetener group from underweight to equal-weight.

Carpetright added 1.5% after it said sales at its UK and Irish business had increased 5.9%, while like-for-like sales in the rest of Europe were 3.6% higher. AMEC rose 0.7% after the engineering group said its joint venture with Babcock International had been appointed preferred bidder for a National Grid contract.

Debenhams advanced 2.7% as pre-tax profits at the retailer rose 67.9%. Debenhams said the retail climate had been volatile after unseasonably warm weather.

Decliners

Miners led the decliners. BHP Billiton lost 1.9% in the wake of its copper production having been hit by the strike in August at the Escondida mine in Chile. Kazakhmys slipped 2.5% while Anglo American eased 2.3%.

Autonomy Corporation was hit by profit taking after it reported a 220% increase in third quarter adjusted profit before tax. Shares in the search software company fell 3.2%. Drugmaker Hikma Pharmaceuticals dipped 3.4% following its statement that it expected annual generic sales to be slightly below those achieved in 2005.

Corporate news

Lapp Plats, mining company, today responded to a surge in its share price, admitting that it is in talks regarding a possible acquisition.

Reckitt Benckiser released a bullish set of figures today, with profits in line with forecasts and a hike to its earnings guidance for the year.

[R]7:30AM Asian markets closed mixed, Japan slips, China advances.[/R]
Asian markets ended mixed on Tuesday. The Nikkei 225 Index ended 0.1% lower at 16780.47. Softbank fell 1.1% as the company announced a cut in tariffs and added that it would other incentives in a bid to compete more effectively with its two larger rivals. DoCoMo shares fell 2.13%, and shares of KDDI, Japan second biggest cellular operator, shed 7.1%. Sony, due to report its earnings on Thursday, ended 1.3% higher. Consumer electronics company Matsushita Electric rose 0.6%. Shares of Honda erased earlier gains to close higher 0.2% ahead of its quarterly earnings report Wednesday.

In Hong Kong, the Hang Seng Index ended 0.4% higher at 18153.41, while the China Enterprises Index gained 0.6% to 7496.38. Trading in Hong Kong was range-bound with investors cautious ahead of the Federal Reserve meeting later this week. The Shanghai Composite Index closed 2.6% higher at 1805.18, its highest settlement since Sept. 21, 2001. Strong institutional demand gave large capitalized companies a boost.

South Korean stocks finished flat, as weak technology stocks hurt solid U.S. cues and strong gains by construction shares. The Korea Composite Stock Price Index, or Kospi, rose 0.1% to 1366.50. Construction shares continued to advanced amid local news reports that the government intends to develop two districts near Seoul as residential towns to stabilize surging property prices. Hyundai Engineering & Construction advanced 1.1% and Daewoo Engineering & Construction gained 1.8%.

Australia S&P/ASX 200 retreated from earlier gains to closed 0.3% lower as mining shares tracked declines in oil and copper prices. Shares of BHP Billiton lost 0.5% after the mining group reported weaker-than-expected quarterly results. The Weighted Price Index in Taiwan finished higher 0.8%. Markets in Malaysia, Singapore and Indonesia were closed for holidays.

[R]6:30AM European stocks decline Tuesday on weak oil and mining stocks.[/R]
European markets were lower by mid morning on Tuesday. The FTSE 100 in London was flat at 6,167.0, Frankfurt Xetra Dax lost 0.2% at 6,229.44, the CAC 40 in Paris slipped 0.4% to 5,392.92.

Advancers

Neste Oil outperformed in a generally flat oil sector, after reporting a 67% growth in third-quarter operating profit, easily beating market expectations thanks to a strong diesel market, the company stated. Shares in the Finnish refiner rallied 3.8%.

Banks gave some support to the markets, with gains for Erste Bank of Austria after Merrill Lynch upgraded the stock. Other high growth companies in the sector also performed well. Raiffeisen rose 1.2%, while Allied Irish Banks rose 2%.

Decliners

Other stocks in the energy sector, however, were falling as crude prices undermined most shares. Norsk Hydro fell 1.8% , after it reported a smaller-than-expected 18% rise in third-quarter operating profit. Statoil shed 0.6%.

London-listed miners were on the decrease too, as precious and base metals prices also retreated, while BHP Billiton announced quarterly copper output had fallen. BHP shares fell 2.5% and Anglo American shed 2.5%.

Oil and gold

Crude oil futures edged down Tuesday in electronic trading, as bargain-hunting trimmed earlier losses sparked by softening supply concerns. December contract on the NYME traded at $58.70 a barrel, down 11 cents from Monday.

Gold traded in London at $578.40 bid per troy ounce, down from $584.20 late Monday.

Currencies

The U.S. dollar was mostly higher against other major currencies in European trading Tuesday morning. The euro was quoted at $1.2540, down from $1.2546 late Monday in New York. The British pound traded at $1.8699, up from $1.8649. The dollar traded at 119.51 Japanese yen, up from 119.30.

[R]5:00AM Gold futures plunged due to stronger dollar and weaker oil.[/R]
December gold lost $13.50 to settle at $582.90 a troy ounce on the NYME. December silver sank 29.5 cents to end at $11.67 an ounce. January platinum fell $7.70 to $1,074.40 an ounce and December palladium fell $9.15 to $321.35 an ounce. The most-active December copper settled down 1.10 cent at $3.4510 a pound.

Light, sweet crude oil for December delivery dipped 52 cents to finish at $58.81 a barrel, near the middle of its trading range. November heating oil settled down 1.1 cent at $1.6690 a gallon. November unleaded gasoline slipped 0.43 cent to close at $1.4715 a gallon. November natural gas settled down 36.0 cents at $6.881 per million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed 4.80 cents higher at $1.0685 a pound, with March up 4.70 cents at $1.1070. Futures on raw sugar in foreign ports for March advanced 0.09 cent to settle at 11.80 cents a pound.