London Recovers

Ivaylo
29 Nov, 2006
New York City

FTSE stocks moved higher on Wednesday, following six consecutive sessions of losses, helped by bid speculation among financial stocks and strength in the pharmaceuticals sector. Business software group Sage leads the way while insurer Legal & General is trading near the top of the pile as market watchers talk of a possible bid from Dutch insurer Aegon. The FTSE 100 rebounded 38.9 points, or 0.6%, to 6,065.3.

[R]9:30 AM The FTSE 100 rebounds on strong financials and bid speculation.[/R]
The FTSE 100 rebounded 38.9 points, or 0.6%, to 6,065.3, after a fall of 2.9 % over the last six sessions.

Advancers

The leading large-cap was software company Sage, up 6.2%, after it reported a 14% rise in pre-tax profits and said it remained confident about prospects for continued growth. Legal & General jumped 3% amid rumours that Aegon, the Dutch insurer, was eyeing a takeover. Rival Prudential gained 2.1% on talk it could be a target for HSBC. Plumbing group Wolseley moved 3.8% higher despite first quarter profits rising only marginally.

Pharmaceutical stocks rose on reports that Swiss drugmaker Novartis may sell its baby food maker Gerber Products to food group Nestle. GlaxoSmithKline firmed up 3% while AstraZeneca gained 2.5%.

The mining sector was given a boost by commodity price rises as gold, silver and copper all rallied. BHP Billiton rose 1.8% and Xstrata was higher by 2.1%.

Decliners

Many of the stocks trading to the downside were ex-dividends. National Grid gave up 0.6%, Associated British Foods lost 1.3% and SABMiller fell 0.8%.

Corus was down a touch despite third quarter figures showing a 133% rise in underlying earnings to 168 million pounds as higher prices for its products outweighed higher raw material prices.

[R]7:30AM Asia finished higher boosted by Tokyo rally spurred by industrial data.[/R]
Asian markets finished broadly higher. The Nikkei 225 Average in Japan ended 1.4% higher at 16,076.20, marking its first close above the 16,000-point level in more than a week. Shares of Toyota gained 1.5% while tire maker Bridgestone rose 2.9%.

Camera and copier maker Canon Inc added 1.7% while electronics conglomerate Toshiba surged 3.1%. Sumco Corp moved 5.9%, higher, reversing early losses, after the business daily Nihon Keizai Shimbun reported the second biggest manufacturer of silicon wafers in the world plans to issue 60 billion yen of new shares in a bid to raise investment capital.

The Hang Seng Index in Hong Kong ended 0.8% higher at 18,780.93, rebounding from its biggest one-day plunge in more than five years in Tuesday session. The Hang Seng China Enterprises Index, which tracks 37 mainland-incorporated companies, rose 3.3% to 8,402.26. Property developer Cheung Kong Holdings gained 0.6% while Sun Hung Kai Properties, largest developer in Hong Kong by market capitalization, put up 0.8%.

Australian leading share index, the S&P ASX/200, was up 1.3%, to end 5,432.50. Shares of Australian energy firm Woodside Petroleum rose 1.2%. South Korea Kospi gained 0.8% to end at 1,422.55. LG.Philips LCD Co. rose 1.4%, as Japanese higher industrial production data eased worries of a slowing in global consumption. Singapore Straits Times Index rose 1.2%, and Malaysia''s KLSE Composite was up 0.7%. Taiwan Weighted Price Index added 0.4%.

[R]6:30AM European stocks advance in early session Wednesday on relieved worries.[/R]
European markets were higher in early trading on Wednesday. The U.K. FTSE 100 index rose 0.52% at 6,057.30, the German DAX Xetra 30 index rose 0.47% at 6,311.60, and the French CAC-40 index increased 0.54% at 6,554.67.

Advancers

GlaxoSmithKline traded 2.3% higher after U.S. rival Pfizer said that it would cut 20% of its U.S. salesforce as part of a cost-cutting drive. Exporters such as automakers Volkswagen and DaimlerChrysler each rose more than 0.5% while technology shares such as chip maker Infineon Technologies advanced 0.79%.

Shares in steelmaker Corus Group rose 0.3% after it said its third-quarter net profit almost tripled to 142 million pounds, from 50 million pounds a share, a year ago. shares in U.K. building materials company Wolseley rose 3.6% after declining more than 10% in the past month. Morgan Stanley upgraded Credit Suisse to overweight from equal-weight. Credit Suisse shares rose 1.5%

Decliners

Morgan Stanley downgraded several European banks including UBS and Northern Rock. UBS shares dipped 0.5%, Northern Rock shares lost the same amount.

Oil and gold

Oil rose to a one-month high as cold weather swept eastward across the U.S., the world biggest energy user, spurring demand for heating fuel. Crude oil for January delivery rose 54 cents to $61.53 a barrel in after-hours trading on the NYME. The contract traded at $61.43 in early trading in London. Brent crude oil for January rose 49 cents to $61.70 a barrel in electronic trading on the ICE Futures exchange in London. Gold traded in London at $638.25 per troy ounce, up from $636.00 late Tuesday.

Currencies

The U.S. dollar was higher against other major currencies in European trading Wednesday morning. The euro was quoted at $1.3160, down from $1.3189 late Tuesday. The British pound was at $1.9490, down from $1.9509. The dollar bought 116.19 Japanese yen, up from 116.10.

[R]5:00AM Gold futures fell on Tuesday due to profit-taking, silver gained.[/R]
February gold lost $3.40 to $643.70 a troy ounce on the NYME. March silver settled up 12.6 cents to $13.812 an ounce. January platinum gained $3.20 to close at $1,150.60 an ounce. March palladium settled $1.65 lower to $328.65 an ounce. Most active March copper moved 4.55 cents lower at $3.17 per pound.

Crude oil futures rallied for a second straight session and briefly topped $61.00 a barrel Tuesday on forecasts of colder weather and uncertainty ahead of an OPEC meeting. The January crude contract on the NYME advanced 67 cents to end at $60.99 a barrel. December heating oil settled up 2.31 cents at $1.7283 a gallon. December unleaded gasoline added 3.29 cents to finish at $1.6266 a gallon. December natural gas rose 32.0 cents to close at $8.318 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures ended 2.35 cents higher at $1.2035 a pound. March futures of raw sugar in foreign ports settled up 0.18 cent at 11.99 cents a pound.