FTSE Higher on Miners

Ivaylo
01 Dec, 2006
New York City

Mining stocks were strong after gold broke through resistance at $640. Also, Goldman Sachs gave Xstrata a helping hand as it kept its buy advice on the shares and lifted its price target. The broker also raised its price targets on Anglo American, BHP Billiton and Rio Tinto, thus aiding the market. Morgan Stanley has repeated its overweight advice on power supplier International Power and hiked its price target. The FTSE 100 advanced 31.7 points or 0.5% in mid-morning exchanges.

[R]9:30AM London benchmark index advances on Friday on mining stocks.[/R]
The FTSE 100 in London advanced 31.7 points or 0.5% to 6,080.5 in mid-morning exchanges.

Advancers

Vedanta Resources gained 2.3% and Xstrata traded 3.3% higher. Xstrata was also lifted after Xstrata Nickel announced the first phase of development of its Fraser Morgan nickel project in Ontario. Rio Tinto rose 1.40%, while BHP Billiton advanced 0.52%.

International Power shares added 3.8% after Morgan Stanley raised its price target. Fellow utilities followed suit with Kelda Group up 2.4% and United Utilities 2.3 % higher.

In corporate news, Wolverhampton & Dudley Breweries shares climbed 3.8% after it reported solid full-year results.

UK insurer Prudential was trading 1.4% to the good on a positive Asia outlook. The company said it expects at least to double 2005 asian life new business profits by 2009. Morgan Crucible rose 1.2% on the back of a broker upgrade. Credit Suisse raised its price target on the engineer.

Decliners

Industrial products manufacturer Chapelthorpe declined too as the shares lost around a quarter of their value after it warned of exceptionally difficult trading conditions and axed its dividend. Chapelthorpe plunged 27.59%.

AstraZeneca remained depressed, as yesterdays comments from Sanford Bernstein remained fresh in the mind. AstraZeneca lost 1.32%. Citigroup downgraded Rank Group from buy to hold, sending the shares of the leisure group 3.2% lower.

[R]7:30AM Asian markets ended mostly higher with Japan up, while HK dipped.[/R]
Asain markets finished mostly higher on Friday. Japanese benchmark Nikkei 225 stock index rose 47.45 points, or 0.3%, to close for the week at 16321.78. In Hong Kong the Hang Seng Index fell 269.66 or 1.4%, to 18690.82. Local phone operator PCCW plunged 5%, a day after shareholders rejected a proposal to sell the stake of chairman Richard Li in the company. China Mobile fell 2.5%, Sino Land slipped 0.1% and Sun Hung Kai Properties dropped 2.2%.

The Chinese yuan rose to a fresh high against the U.S. dollar, capping a week of gains and boosting share prices to a five-year high in Shanghai. The Shanghai Composite Index edged up 0.1% to 2102.05, its highest closing level since July 25, 2001, when it ended at 2112.25.

The Weighted Price Index of the Taiwan Stock Exchange climbed 45.85 points, or 0.6%, to 7613.57. Singapore shares dipped on cautious trading, but traders said the market uptrend is likely to continue over the next few weeks. The benchmark Straits Times Index declined 2.49 points, or 0.1%, to 2836.04.

South Korean shares inched up, as news that Chinese steelmaker Shanghai Baosteel Group may ask Posco to buy its shares buoyed the Korean company stock. The Korea Composite Stock Price Index, or Kospi, moved up 2.15 points, or 0.2%, to 1434.36. In Austarlia, the benchmark S&P/ASX 200 index shed 54.2 points, or 1%, to 5427.9. The stock market fell, with finance stocks under pressure as investors braced for weaker near-term performances on US markets.

[R]6:30AM European stocks gain in early trading on Friday on EDF issue.[/R]
European markets were higher on Friday. In mid-morning trade, London FTSE 100 climbed 0.5% to 6,080.3, Frankfurt Xetra Dax gained 0.6% to 6,350.17, and the CAC 40 in Paris added 0.5% to 5,353.74.

Advancers

EDF gained 6.2% after a French constitutional court said on Thursday that government controls on prices charged by energy suppliers were incompatible with European Union targets for opening up energy markets to competition.

The court was ruling on the proposed merger between Gaz de France and Suez. It cleared an energy bill needed for the privatisation of GdF, but the court ruled that the planned merger could not become effective before July, 2007. Shares in GdF fell 1.7%, while Suez shed 0.6%.

Air carrier Lufthansa gained 4.9% after Morgan Stanley lifted its price target on the stock. EADS, the European aerospace group, rose 3.8% after it was reported to be close to fixing a launch for its A350 mid-sized long-haul jet.

Decliners

Ahold, the Dutch retailer, fell 3% after it said it faced a challenging fourth quarter after its slightly better-than-expected third-quarter numbers revealed tough conditions in the US.

Oil and gold

Oil prices retreated Friday on easing worries that OPEC would significantly reduce output to boost prices following a remark by Venezuela that cartel members had agreed to keep oil at $50 a barrel. Light, sweet crude for January delivery fell 43 cents to $62.70 a barrel on the NYME. January Brent crude at London ICE Futures exchange slipped 42 cents to $63.84 a barrel.

Gold opened Friday at a bid price of $647.79 a troy ounce, up from $647.10 late Thursday.

Currencies

The euro bought $1.3242 in morning European trading, a little below its level of $1.3250 in New York late Thursday and off a session high of $1.3282. The British pound on Thursday rose to its highest level against the dollar since September 1992. It advanced to $1.9748 on Friday before settling back to $1.9689, still above its Thursday level of $1.9661. The dollar rose to 116.20 Japanese yen from 115.75 yen.

[R]5:00AM Gold and silver prices gained on Thursday on strong oil prices.[/R]
February gold futures jumped $11.10 to finish at $652.90 a troy ounce on the NYME. March silver futures gained 35.5 cents to close at $14.115 an ounce. Meanwhile, January platinum rose $24.30 to finish at $1,176.70 an ounce. March palladium gained $6.85 to close at $334.35 an ounce. March copper added 4.05 cents to settle at $3.1955 a pound.

The January crude oil contract jumped $1.31 to an intraday high of $63.77 a barrel before closing 67 cents higher at $63.13 a barrel. December heating oil rose 1.80 cents to close at $1.8133 a gallon, December unleaded gasoline ended 14.85 cents higher at $1.8191 a gallon. Natural gas for January delivery on the Nymex settled 2.7 cents lower at $8.84 a million British thermal units.

At the New York Board of Trade, Arabica coffee futures rose. December coffee closed 1.15 cents higher at $1.1970 a pound. March raw sugar settled 0.01 cent higher at 12.37 cents a pound, while May fell 0.01 cent to 12.26 cents a pound.