FTSE Recoverers on Unilever

Ivaylo
02 Nov, 2001
New York City

The FTSE was helped by strong results from Unilever and a recovery in the pharmaceuticals sector. Unilever led the advancers after the Anglo-Dutch consumer goods group unveiled plans to return more cash to shareholders along with its third quarter results. GlaxoSmithKline and Astrazeneca gained following a report from a healthcare information company. The FTSE 100 recouped from its early losses to trade just 0.6 points lower at 6,149.0.

[R]9:30AM The FTSE recovered from early losses on Unilever, pharma stocks.[/R]
The FTSE 100 in London bounced back from its early losses to trade just 0.6 points lower at 6,149.0.

Advancers

Unilever led the advancers with a gain of 4.5%. The company said it would replace pay a 750 million euros special dividend this year, replacing the 500 million euros share buyback planned for 2006, and it also unveiled plans for a further 1.5 billion euros share buyback in 2007.

Astrazeneca added 1.6%. GlaxoSmithKline, up 2.2%, also benefited from a JP Morgan upgraded to neutral from underweight. GlaxoSmithKline and Astrazeneca gained following a report from a healthcare information company which showed global pharmaceutical sales rose 5% in the 12 months to August. Both companies have underperformed the market recently and traders said they appeared good value at these lower levels.

Strong gas prices sent BG Group up by 51% to 3.6 billion pounds by the end of the third quarter, helping it grow profits by 45 %. The shares rose 1.3%.

Pub chain JD Wetherspoon rose 5.6% after it reported stronger sales growth in its smoke-free outlets ahead of next year’s ban on smoking in public places.

Decliners

Smith & Nephew fell 1.2% after the medical devices maker said it was in preliminary merger discussions with Biomet, its US rival, in a deal aimed at creating an orthopaedic specialist worth up to $20 billion and capable of competing against the US sector leaders, Zimmer and Stryker

Wolseley fell 1% as the largest plumbing supplier in the world announced a six further small acquisitions for a total of 61 million pounds. Wolsely is highly acquisitive and has spent 331 million pounds on 16 deals in Europe and North America since the start of the current financial year in August.

ICI fell 1.4% after the speciality chemicals maker cautioned it continued to experience higher raw material prices, in spite of falling oil prices.

Miners retreated after a strong showing during the previous session. Antofagasta fell 1.6% while Xstrata was 0.9% weaker.

Economic news

The European Central Bank kept its main interest rate at 3.25% on Thursday as forecast, and signalled to markets it intended to raise rates again in December.

[R]7:30AM Asian stocks end mixed, HK advances while Tokyo dips.[/R]
Asian markets closed mixed on Thursday. The benchmark Nikkei 225 index fell 0.2% to finish at 16350.02 points on the Tokyo Stock Exchange. A retreat overnight on US market on lackluster economic data. The U.S. is a huge market for Japanese exports, and any downturn there is seen as having a big impact on Japan economy. Asahi Glass fell 3.2% after the glass maker Wednesday revised down its profit outlook for 2006.

Hong Kong stocks rallied to hit another fresh record high led by large-cap stocks HSBC Holdings and China Mobile. HSBC led the advance and rose 1%, while China Mobile jumped 3.7%, record closing highs for both stocks.

Elsewhere in the region, the Kospi in South Korea rose 0.5% and Taiwan Weighted Price Index rose 0.8%. Singapore Straits Times Index fell 0.6%.The benchmark Shanghai Composite Index, which tracks Class A and B shares, finished down 0.2% at 1851.31.

Australia S&P/ASX 200 fell 0.1% to 5409.40, easing back from Wednesday record close of 5416.40. BHP Billiton gained 0.1% and fellow miner Rio Tinto slipped 0.4%. Philippine stocks gained for the 10th straight session to a fresh nine-year high, buoyed by investor confidence in the economic outlook of the country. The benchmark 30-company Philippine Stock Exchange Index rose 0.5% to 2721.78.

[R]6:30AM Europe falls on banks, miners, downbeat US economic data.[/R]
European markets were lower by mid morning on Thursday. The FTSE 100 in London shed 0.25 to 6,138.9, Frankfurt Xetra Dax fell 0.23% to 6,276.35, and the CAC 40 in Paris lost 0.7% to 5,334.53.

Advancers

Bucking the weaker banking sector, Credit Suisse, the investment bank, gained 3.1% after the third-quarter net profits came in well ahead of expectations as strong trading income helped it on the way to a year of expected record earnings.

Altana, the German drugs and chemicals manufacturer, gained 3.2% after reporting a 19% rise in nine-month core earnings, beating expectations, thanks to a strong performance at its chemicals division.

Unilever, the Anglo-Dutch consumer goods group, announced a 4.8% rise in third-quarter core sales at the top end of expectations. This outshone a disappointing fall in margins as the company spent heavily on branding and advertising to aid its recovery. The Amsterdam-listed shares gained 3.2%.

Decliners

Miners fell on the demand implications behind slowing growth in the US. Rio Tinto was off 1.4%, while Antofagasta slipped 1.5%.

The performance contrasted with that of domestic rival UBS, which on Tuesday reported a 21% fall in third-quarter profits, missing expectations. UBS shares fell 0.3%, while those of Deutsche Bank, which reported lower trading revenues on Wednesday, fell 0.2%.

[ Oil and gold

Oil prices fell slightly Thursday as the market reacted to a weekly U.S. report that showed a climb in crude oil stocks but a larger-than-expected drop in product inventories. Light sweet crude for December delivery fell 11 cents to $58.60 a barrel in electronic trading on the NYME.

Gold opened Thursday at a bid price of $614.90 a troy ounce, down from $615.20 late Wednesday.

Currencies

The euro rose to $1.2758 from $1.2756 yesterday. Against the euro, the British pound was at 66.88 pence from 66.85 pence yesterday. The U.K. currency was also at $1.9082 versus the dollar from $1.9095. The yen climbed to 116.77 against the dollar.

[R]5:00AM Gold rose to 8-week high Wednesday, as the dollar softened.[/R]
December gold ended at $619.30 an ounce, up $12.50, after peaking at $619.70 Wednesday at the NYME. December silver futures moved 20.5 cents higher at $12.475 an ounce. January platinum advanced $14.20 to close at $1,100.70 an ounce. December palladium ended $1.40 up at $324.10 an ounce. December copper contract plunged 10.45 cents to settle at $3.2410 per pound

December crude oil futures declined 2 cents to finish at $58.71 a barrel. December heating oil futures settled down 1.55 cents to $1.6515 a gallon. December gasoline closed 3.57 cents higher at $1.4630 a gallon. December natural gas gained 17.8 cents to end at $7.712 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed 0.40 cent higher at $1.0865 a pound. March futures on raw sugar in foreign ports settled 0.05 cent lower at 11.50 cents a pound.