Tate Leads FTSE Higher

Ivaylo
13 Dec, 2006
New York City

UK market was on the advance through the morning as Tate & Lyle surged, while some upbeat miners countered the losses in banking shares. Broker comments from JP Morgan put Alliance & Leicester back although the group announced forecast profits for this year would top forecasts of analysts. In mid-day trade the FTSE 100 was 17 points, or 0.4%, higher at 6,184.4 having opened the session lower.

[R]9:30AM The FTSE 100 advanced on Tate despite weak banking stocks.[/R]
In mid-day trade the FTSE 100 in London was 17 points, or 0.4%, higher at 6,184.4, having opened the session lower.

Advancers

Tate & Lyle gained 3.8 per cent as Deutsche Bank upgraded clients to buy the shares ahead of a trading update next week. Car rental group Avis Europe stated that it expected for underlying 2006 pre-tax profit to have improved after a stronger-than-anticipated second-half. Avis Europe advanced 5.71%.

Amec announced that profits in 2006 will be 15 million pounds below previous expectations, in view of restructuring and legal costs in UK construction and a weaker than expected performance in pipeline and nuclear capital projects. Amec gained 3.53%.

Discount furniture retailer Homestyle, higher 4.52%, has consented to a takeover by its main shareholder Steinhoff of South Africa in a deal worth around 326.4 million pounds.

Lehman Brothers upgraded Anglo American to equal-weight from underweight as the broker also raised its price target, while JP Morgan upgraded its target on Rio Tinto. Anglo American advanced 0.20%, while Rio Tinto gained 0.58%.

Decliners

Sports betting group 32Red shares slumped 23.85% as it warned over trading and revealed a bank covenant breach.

Vigilant Technology plunged 18.18% after giving a warning that results for 2006 will be below current market forecasts, while a warehouse fire will delay some shipments.

Alliance & Leicester lost opening ground to trade down 1.08%, the biggest large-cap decliner, on concerns about mounting bad loans.

[R]7:30AM Asian markets finished mixed with Japan up and HK down.[/R]
Asian markets closed mixed on Wednesday. The Nikkei 225 Index in Japan edged higher 0.3% to 16,692.93. Carmakers and other exporter stocks were buoyed by the weaker yen against the dollar. Nissan advanced 1.4% and Sony rose 1.9%. Airline stocks also gained tracking a decline in oil futures prices. All Nippon Airways advanced 1.4%.

Declines in Chinese telecommunications companies in Hong Kong led stocks lower. The Hang Seng Index shed 1.0% to 18,718.19. Fixed-line operator China Telecom fell 3.96% and China Netcom shed 1.65%. China Mobile lost 2.62%. China Unicom finished down 4.12% on dwindling hopes for a near-term deal to break up the company.

The Korea Composite Stock Price Index, or Kospi, advanced 0.5% to 13,83.28. Shinhan, the second-largest banking institution in the country, advanced 1.9% on reports that it had agreed with the creditors of LG Card on the final terms of its acquisition of LG Card.

The S&P/ASX 200 Index in Australia moved up 0.3% to close at 5,488.2. Shares of CSL advanced 7.9%, while Toll Brothers added 4.9%. The blood-products group CSL raised its profit guidance and transport group Toll stated it would spin off its infrastructure assets into a separate unit.

The market in Taiwan dropped 0.1% to 7,450.30. Fubon Financial advanced 2.5% and Cathay Financial gained 2.0%, while Pacific Construction plunged 7%. Singapore Strait Times Index shed 0.3% to 2,884.15 and New Zealand NZX-50 Index inched up 0.4% to 3,945.98. Shanghai Composite Index gained 0.2% to 2,223.45.

[R]6:30AM European markets move slightly higher Wednesday as banks rally.[/R]
European markets were higher on Wednesday. By mid morning, FTSE 100 in London was up 0.1% to 6,160.7, Frankfurt Xetra Dax was flat at 6,476.33, and the CAC 40 in Paris was 0.1% higher at 5,434.65.

Advancers

Inditex, owner of the Zara, Pull and Bear and Massimo Dutti clothing brands, advanced 4.6% as its net income for the first nine months of 2006 grew 22% to 634 million euros as revenue also rose 22%, to 5.67 billion euros.

Raiffeisen International, the Austrian bank with significant operations in central and eastern Europe, including Russia, advanceed 2.6%, after Citigroup upgraded it to buy and raised its price target.

Erste Bank, another Austrian bank which also has substantial holdings in eastern Europe, gained 1%. Dutch bank ABN Amro advanced 3.3% after putting forward impressive strategy for next year.

Fashion retailer Hennes & Mauritz gained 0.6% in Stockholm, while London-listed peer Next advanced 1.9%.

Lagardere, the largest publishing group in France, rose 3.5% in Paris after UBS analysts upgraded their rating on the media company to buy from neutral.

Decliners

Safran, the French aero engine maker, fell 6.4% after reducing its full-year operating profit margin target to 4% from its previous goal of 5.5-6%.

Oil and gold

Crude oil held near a two-week low after the IEA reduced its forecast for Chinese demand. Crude oil for January delivery fell 13 cents to $60.89 a barrel in after-hours electronic trading on the New York Mercantile Exchange in early trading in London. Brent crude fell 31 cents, or 0.5%, to $61.21 a barrel and traded at that price on the ICE Futures exchange in London.

Gold declined in London for a second straight day as oil prices traded close to the lowest in two weeks. Gold for immediate delivery in London fell as much as $1.70, or 0.3%, to $628.35 an ounce.

Currencies

The U.S. dollar traded mixed versus other major currencies in European trading Wednesday. The euro was at $1.3268, down from $1.3277 late Tuesday. The British pound traded at $1.9711, up from $1.9700. The dollar bought 117.08 Japanese yen, up from 116.90.

[R]5:00AM Gold and silver futures slipped as market awaited FOMC decision.[/R]
February gold declined $3.10 to end at $631.70 a troy ounce on the New York Mercantile Exchange and March silver shed 4.5 cents to $13.98 an ounce. In later trading, the metal rebounded by 2 cents. January platinum settled up $5.80 to $1,115 an ounce while its sister metal palladium lost $2.85 to close at $330.90 an ounce. March copper contract dipped 3.90 cents to settle at $3.0945 per pound.

January crude oil slid 20 cents to finish at $61.02 a barrel and January heating oil declined 0.19 cent to $1.7224 a gallon. January unleaded gasoline lost 0.38 cent to end at $1.5950 a gallon. January natural gas advanced 0.3 cent to close at $7.430 a million British thermal units.

On the New York Board of Trade, March Arabica coffee futures finished 0.90 cent lower at $1.2775 a pound. Futures on raw sugar in foreign ports for March moved 0.05 cent lower at 11.37 cents a pound.