London Dips as Oil Tumbles

Ivaylo
17 Nov, 2001
New York City

London shares traded lower in the morning, despite a new record high on the US market overnight, as a slide in crude prices has knocked oil groups and also energy companies. BG, BP and Royal Dutch Shell were all lower as is British Energy despite reporting an improved half year performance. Weakness in metal prices overnight led the mining sector lower. The main index FTSE 100 was 15.1 points or 0.2% lower in mid-morning trade.

[R]9:30AM London stocks were lower in early trading Friday on oil stocks.[/R]
The main index FTSE 100 in London was 15.1 points or 0.2% lower at 6,239.8 in mid-morning trade.

Decliners

BP led blue-chip fallers in London, shedding 1.7%, while BG Group was down 1.3% and Royal Dutch Shell B shares lost 0.9% on the lower oil price.

British Energy was down 0.9%, after it said that cracked pipes at two of its nuclear power stations were expected to have a significant impact on output for the financial year.

Copper prices once again hit mining stocks as Shanghai Futures Exchange contracts were lower across the board, increasing supply concerns. Kazakhmys fell 1.4%, BHP Billiton was lower by 1.2% and Anglo American lost 1.1%.

Some mid-cap companies were also dragged down by oil stocks with Dana Petroleum sliding 2.3% and Tullow Oil down 2%.

Advancers

ITV shares gained 1.1% after the Financial Times reported that RTL ias working with private equity backers on a possible 5 billion pounds offer for the commercial broadcaster.

Northern Foods put on 2.5% after ABN Amro upgraded the stock from hold to buy and raised its price target.

Ground preparation group Keller has issued another very bullish trading statement. Trading since the half year has been extremely good, it stated, culminating in an outstanding performance in October with orders up around 15% since the end of June. Keller advanced 6.45%.

Northern Foods made strong gains after ABN Amro turned buyer on the shares following interim figures earlier in the week. The Dutch broker also lifted its price target. Northern Foods gained 5.46%.

[R]7:30AM Asian markets close mostly higher Friday, Japan slips on bank worries.[/R]
Asian markets ended broadly higher on Friday. The benchmark Nikkei 225 index in Tokyo shed 0.45%, to close at 16091.73 points. The market was in positive territory at first, following record highs in New York overnight, but the index fell later as investors took to profit-taking in the scarcity of fresh earnings or new data. Mitsui shed 3.8% and oil company Inpex Holdings lost 3.51%.

In Australia, the benchmark S&P/ASX200 index gained 0.5% to 5419.7. The market bounced back from recent losses on the back of financial stocks, with National Australia Bank up 1.2%. Babcock & Brown soared 6.3% on plans for an offshore funds-management business with joint-venture partner GPT Group, which gained 2.1%.

The Kospi in South Korea finished up 0.1%, at 1412.22. South Korean markets were buoyed by airline and shipping stocks, although gains were mostly erased by losses in technology shares. Korean Air jumped 3% and Asiana Airlines advanced 2.2%. Hyundai Merchant Marine, added 4.2% and Hanjin Shipping moved 1.8% higher.

In Hong Kong, the Hang Seng Index closed 0.15% higher at 19182.71. Taiwan markets moved slightly up as the Weighted Price Index of the Taiwan Stock Exchange advanced 0.03% to 7259.54. mobile phone and display makers were weak and countered advances in automobile, memory chips, and personal-computer stocks.

[R]6:30AM European markets dropped in early trading Friday on weak oil shares.[/R]
European markets were lower in early trading on Friday. By mid morning, the FTSE 100 in London was 0.2% lower to 6,239.8, Frankfurt Xetra Dax gained 0.1% to 6,449.23, and the CAC 40 in Paris lost 0.4% to 5,483.12.

Decliners

Oil stocks led the decliners on Friday. Norsk Hydro fell 4.1%, while domestic rival Statoil shed 4.1%. Finnish refiner Neste Oil was down 2.1%, Repsol of Spain lost 2%, while French Total fell 1.9%.

Advancers

Richemont, the Swiss luxury goods group, gained 2.8% after reporting a better-than-expected 22% rise in first-half net profit, thanks to growth in demand for expensive watches. The company said it was confident that full-year results would be significantly ahead of last year.

French luxury goods maker Hermes International gained 3.7%. German chipmaker Infineon gained 1.8% after ABN Amro raised its rating on the company from hold to buy and lifted its price target. Hypo Real Estate, the German property lender, gained 2.1% after West LB raised its price target on the stock from add to buy.

Oil and gold

Oil declined $56 on Friday to its lowest level in a year. U.S. crude was down 76 cents at $55.50 a barrel. London Brent crude was 48 cents lower at $58.06.

Gold opened Friday at a bid price of $617.80 a troy ounce, down from $624.40 late Thursday.

Currencies

The euro edged slightly down against the dollar Friday on positive economic news from the United States. The euro bought $1.2776 in late morning European trading, compared with $1.2795 in New York late Thursday. The British pound slipped to $1.8848 from $1.8882. The dollar was up against the Japanese yen, buying 118.35 yen from 118.19 yen on Thursday.

[R]5:00AM Gold and copper futures declined on Thursday on profit-taking.[/R]
December gold lost $2.10 to settle at $621.70 a troy ounce on the NYME. December silver finished unchanged at $12.945. January platinum gained $18.50 to end at $1,189.30 an ounce, down from a peak of $1,199. December palladium advanced $3.45 to close at $322.25 an ounce. Most-active December copper slipped 5.35 cents to end at $3.0410 per pound, after dipping to a fresh 4 1/2-month low of $3.0305.

Crude oil futures on the NYME plunged to a one-year low. The front-month December light, sweet crude contract closed down $2.50 at $56.26 a barrel. December heating oil lost 3.19 cents to $1.6605 a gallon and December gasoline settled down 5.25 cents at $1.5296 a gallon. December natural gas dipped 36.5 cents to end at $7.755 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures moved 1.65 cents lower to close at $1.1650 a pound, after reaching a seven-month high of $1.2020 a pound. March futures on raw sugar in foreign ports settled 0.26 cent lower at 11.53 cents a pound.