Miners Drag FTSE 100 Lower

Ivaylo
08 Dec, 2006
New York City

The top performing shares on London market erased early losses by the afternoon helped by some bid speculation over Pearson believed to be the next in line. Other takeover speculation also helped to cancel out losses with chemical firm ICI, up on reports of a possible connection with Akzo Nobel of Holland. The mining industry dragged the benchmark index lower after Merrill Lynch downgraded the sector to neutral. The FTSE 100 was marginally lower 0.07% at 6,128 in afternoon trading.

[R]9:30AM The FTSE 100 was lower on Friday due to weak mining stocks.[/R]
The FTSE 100 in London was fractionally lower 0.07% at 6,128 in afternoon trading.

Advancers

The newspaper and education publisher, Pearson, made steady gains on the back of reports that private equity bidders are approaching the group. There was also some talk of interest in its French daily, Les Echos. Pearson was up 1.33%.

Imperial Chemical Industries was also higher 2.04% on reports of a possible tie-up with Holland''s Akzo Nobel following the sale of its Quest business.

Shares in Yoomedia surged 40% following news that it had agreed to provide some of its most popular games for BT new next-generation TV service, BT Vision.

UK high street bank Barclays was up, 1.49% for a second day as reports of a possible bid from Bank of America refuse to go away. Royal Bank of Scotland and Lloyds TSB were also higher, 0.31% and 1.00% respectively.

Swedish healthcare equipment firm Getinge has agreed to purchase Huntleigh Technology Getinge offer helped shares in Huntleigh zoom 26.93%.

Decliners

The mining sector was in the red after Merrill Lynch lowered the sector to neutral on worries about a slowdown in the global economy. The broker downgraded Antofagasta and Kazakhmys to sell and lowered BHP Billiton, Rio Tinto and Xstrata to neutral. Antofagasta dipped 5.14%, Kazakhmys slipped 3.93%, BHP Billiton was off 2.98%, Rio Tinto declined 2.17% and Xstrata declined 2.61%.

Benson & Hedges producer Gallaher also lost despite Citigroup upgrading the shares to hold” from sell in the wake of news of the takeover approach. Gallaher shed 2.52%.

[R]7:30AM Asian markets ended mostly lower on Friday with Japan, HK down.[/R]
Asian markets mostly declined on Friday. The Nikkei Average of 225 companies ended down 55 points, or 0.3% , to 16,417.80. October core machinery index advanced 2.8% from the previous month, but failed to match expected 5.7% growth.

NTT DoCoMo declined 1.7% after the cellular provider posted its first-ever net decline in mobile subscribers in November. Sanyo Electric Co. shed 3.1% after NTT DoCoMo said Thursday it would withdraw 1.3 million cellphone batteries made by a Sanyo unit on safety concerns. Japan Tobacco gained 4%, continuing its winning streak from the previous session.

Hang Seng Index in Hong Kong closed 0.6% lower to 18,739.99. The China Enterprises Index of stocks listed in Hong Kong, declined 0.9%. Power tool and vacuum-cleaner maker Techtronic Industries Co advanced 0.8% as the group announced it had bought Whirlpool Corp.''s. China Mobile shed 1.8%, continuing its 2.6% slip in the previous session due to reports of a large share sale by an institutional holder.

Share indexes in Malaysia dipped 0.4% while Taiwan Weighted Price Index slipped 0.7%. Kospi in South Korea also declined 1.4% and Australia S&P/ASX 200 was off 0.7% as well as Singapore Strait Times Index down 0.6%. New Zealand NZX-50 bucked the trend and gained 0.9%.

[R]6:30AM European markets were lower Friday as markets await US job report.[/R]
European markets were trading lower Friday. By mid morning, FTSE 100 in London slipped 0.2% to 6,118.3, Frankfurt Xetra Dax shed 0.3% to 6,394.01, and the CAC 40 in Paris declined 0.5% to 5,353.59.

Advancers

Banks bucked the overall downtrend and advanced. Barclays added 1.1% in the light of recent bid talks, while KBC in Belgium gained 1.9% after sturdy results this week. Capitalia in Italy advanced 2.2%.

Deutsche Börse gained 1% after Citigroup hiked its price target on the German stock exchange operator.

Decliners

Miners listed in London influenced the negative trend on the markets the most after Merrill Lynch reduced its rating on the sector and lowered some indivdual stocks. Xstrata, which was lowered to neutral, shed 3.1%, while Antofagasta and Kazakhmys, both reduced to sell shed 2.8% and 3.1% respectively.

German truckmaker Man, declined 1% on worries it may sweeten its unfriendly bid for Swedish rival Scania after it said on Thursday it was prolonging its offer period. Scania was off 0.3%.

Oil and gold

Crude oil for January delivery advanced 31 cents to $62.80 a barrel in electronic trading on the NYME, up from $62.49 a barrel on Thursday. January Brent crude at London ICE Futures exchange gained 33 cents to $62.90 a barrel.

Currencies

In early European trading, the euro traded at $1.3284, up from $1.3280 in New York late Thursday. In England, the Bank of England abstained from hiking its rate and held it firm at 5 percent Thursday. The British pound traded on Friday at $1.9674, up from $1.9620 on Thursday. The dollar gained slightly to 115.32 Japanese yen from 115.29 yen.

[R]5:00AM Gold and silver prices finished higher on short-covering and higher oil.[/R]
On the NYME, gold for delivery in February finished $1.10 higher at $637 a troy ounce. March silver advanced 24 cents at $14.035. January platinum shed 80 cents to close at $1,124.90 an ounce while March palladium added 90 cents to end at $331 an ounce. The most-traded March copper dipped 5.8 cents to close at $3.1020 per pound.

January crude oil contract gained 30 cents to close at $62.49 a barrel, although the February contract shed 14 cents to $63.38 a barrel. January heating oil lost 1.52 cents to end at $1.7788 a gallon while January unleaded gasoline edged 0.63 cent higher to finish at $1.6275 a gallon. December natural gas declined 5.6 cents at $7.671 a million British thermal units.

December Arabica coffee futures moved 0.20 cent higher to end at $1.2190 a pound on the New York Board of Trade. March futures of raw sugar in foreign ports dipped 0.27 cent to close at 11.22 cents a pound.