IPO Boosts HK, Japan Slips

Ivaylo
27 Oct, 2006
New York City

The Nikkei Average in Japan slipped as investors resorted to profit taking. The banking sector led the decline. Shares in one of the biggest state-owned banks in China advanced 15% in trading on the Hong Kong exchange on Friday, in line with what the market had expected from the debut of the largest-ever initial public offering in the world. Elsewhere in the region, Australia and South Korea dipped, while Taiwan and Malaysia rose.

[R]7:30AM HK buoyed by largest IPO, Japan retreats on banks.[/R]
Asian markets ended mixed on Friday. In Tokyo, The Nikkei 225 Stock Average ended 0.9% lower at 16669.07. Banking company Mitsubishi UFJ shed 1% on concerns that weaker consumer price inflation means the Bank of Japan will be in no hurry to lift interest rates further. Japanese nationwide core consumer prices in September rose 0.25% on year, below analyst expectations of a 0.3% rise.

Advances by Honda, Nissan Motors and Sony cushioned broader losses. Shares of Honda rose 2.4%, while Nissan gained 2.2% on optimism new model releases and Sony rose 1.2%. Canon fell 2.4% after the group reported stronger quarterly profits but failed to upgrade its earnings outlook

The Hang Seng was up as much as 0.5% to 18446.46. In the largest IPO in the world, shares for ICBC soared in Hong Kong but disappointed investors in Shanghai. The largest lender of China saw its stock price rise 15%, but only 5.1% in Shanghai.

Elsewhere, Australia S&P/ASX 200 shed 0.6%. South Korea Composite Stock Price Index, or Kospi, dropped 0.4% while Malaysia KLSE Composite gained 0.5%. New Zealand benchmark NZX-50 index traded nearly flat. Taiwan Weighted Price Index rose 0.6% and Singapore Straits Times Index gained 0.1%.

[R]6:30AM European stocks marginally better Friday, as pharma stocks dip.[/R]
European markets were broadly flat by mid morning on Friday. the FTSE 100 eased slightly to 6,182.7, Frankfurt Xetra Dax was also marginally better at 6,286.34, while the CAC 40 in Paris fell 0.1% to 5,426.07.

Advancers

Telecoms led the advance on Thursday upbeat earnings from Telenor and France Telecom. Meanwhile, Telekom Austria was said to be considering buying a stake in Greek Hellenic Telecom, known as OTE, when the Greek government sells a stake early next year.Telekom Austria gained 2.9%, while OTE added 1%.

Telenor, which performed strongly yesterday, added a further 1.7%, while France Telecom gained 0.6%. Sector peers Deutsche Telekom and Spanish Telefonica gained 1.5% and 1.1% respectively.

Chip stocks were higher, with Infineon up 1.1% and Franco-Italian group STMicroelectronics adding 1%. ASML, the Dutch maker of chip manufacturing equipment gained 1.5%. Nokia, the Finnish mobile phone goup, gained 1.2% after announcing a network contract win in Ukraine.

Decliners

UK pharmaceuticals groups AstraZeneca and GlaxoSmithKline led the decline after downgrades from Credit Suisse. Astra shed 1.9%, while Glaxo fell 2.6%.

Oil and gold

Crude oil futures advanced on Friday, recovering to some extent from a sell-off by some traders who were locking in gains made when prices surged earlier this week. The front-month December light, sweet crude contract on the NYME was up 23 cents to $60.59 a barrel. Brent crude at London ICE Futures exchange rose 26 cents to $61.03 a barrel.

Gold opened Friday at a bid price of $594.00 a troy ounce, down from $594.30 late Thursday.

Currencies

The euro edged down against the U.S. dollar Friday after news that orders to U.S. factories surged last month by the greatest amount in more than six years. The euro bought $1.2678 in morning European trading, compared with $1.2693 in New York late Thursday. The British pound fell to $1.8882 from $1.8907. The dollar was also higher against the Japanese yen, rising to 118.49 yen from 118.39 yen.

[R]5:00AM Gold and silver prices advance Thursday, as the dollar weakened.[/R]
December gold advanced $9 to close at $599.80 a troy ounce on the NYME, while December silver added 35 cents to $12.24 an ounce. December palladium was more restrained for most of the day before ending up $3.40 to $326.50. Most-active December copper finished down 0.45 cent at $3.40 per pound.

December light, sweet crude oil lost $1.04 to close at $60.36 a barrel. November heating oil declined 3.90 cents to end at $1.7000 a gallon. November unleaded gasoline settled down 2.86 cents to $1.5637 a gallon. November natural gas slipped 19.6 cents to finish at $7.497 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed 0.75 cent higher at $1.0760 a pound, with March up 0.70 cent at $1.1155. March futures for raw sugar in foreign ports dipped 0.08 cent to finish at 11.82 cents a pound.