Banks, Miners Boost FTSE

Ivaylo
14 Dec, 2006
New York City

Miners led the FTSE 100 as some traders decided that the recent sell-off had gone too far. Antofagasta and Xstrata led the advancers. Banking company HBOS published a bullish trading statement, noting that its performance in the year to December is expected to exceed market expectations for underlying earnings per share. British Airways Plc surged after rival Qantas Airways Ltd. accepted an improved buyout. By late morning, the FTSE 100 gained 12.6 points, or 0.2%.

[R]9:30AM The UK benchmark index advanced Thursday on strong banks, miners.[/R]
By late morning, the FTSE 100 advanced 12.6 points, or 0.2%, at 6,205.1.

Advancers

Mortgage bank HBOS was a leading advancer after it raised its full-year guidance. The stock rose 1.9% and boosted its peers. Bradford & Bingley was 0.7% higher and Northern Rock was 0.7% higher.

Miners also gained as Morgan Stanley boosted its price target on Xstrata from, sending its shares 3.6% higher. The rest of the sector also rose, with Antofagasta up 2.7% and Rio Tinto 2%.

BT advanced 0.3% after its retail unit set earnings growth targets for the 2006-07 financial year in the teens. It also forecast further growth to 2008.

British Airways, rose 1.7% as Qantas accepted a buyout led by Macquarie Bank Ltd. and Texas Pacific Group, in the biggest aviation takeover of the world.

Decliners

BP lost 1.3%. The second-biggest oil company in Europe said the U.S. Commodity Futures Trading Commission staff is recommending civil enforcement actions against it for improper trading of unleaded gasoline futures contracts in 2002.

Drax Group lost 1.6%, after Citigroup lowered its stock recommendation to sell from hold. EMI Group dropped 8%. The world third-largest music company stated that talks with a potential bidder have now stopped as it had not received an offer that reflects the value of the company.

[R]7:30AM Asian markets advanced Thursday as Australia, China surge.[/R]
Asian markets advanced on Thursday. The Australian market ended at a record high, supported by M&A activity including an $8.73 billion private-equity takeover of Qantas Airways. The benchmark S&P/ASX 200 index finished up 1.55% at 5,573.1. Miners also closed higher, with BHP Billiton 1.9% higher and Rio Tinto rising 1.6%. Chinese stocks reached a new high, surpassing previous peak set in 2001 on renewed confidence in the expectations for a stronger local currency and a firmer market. The Shanghai Composite Index advanced 1.2% to close at 2,249.11.

In Japan, the benchmark Nikkei 225 stock index gained 0.82% to finish at 16,829.20. Toyota Motor advanced 0.96% and Kyocera added 1.12%. Other advancers included Canon Electronics, gaining 3.23% and Internet-services company Softbank, advancing 1.61%. Toshiba closed 0.13% lower after it reported the sale of its entire stake in Toshiba-EMI to EMI Group of Britain.

The Hang Seng Index in Hong Kong moved 1.1% higher to 18,919.40. Among the big advancers was China Communications Services, networks builder for phone operators. It gained 7.1% after U.S. telecommunications-equipment maker Cisco Systems announced it would pay $50 million for a stake in the Chinese company.

The Korea Composite Stock Price Index, or Kospi, surged 2.5% to close at 1418.38. Advances were across the board as Kookmin Bank gained 2.3% and Shinhan Financial Group advanced 3.1%. Samsung Electronics and Hynix Semiconductor added 2% and 2.7%, respectively. LG.Philips LCD soared 3.9% on profit-taking after four consecutive sessions of declines. Taiwan shares made a moderate rally that closed five consecutives sessions of declines. The Weighted Price Index of the Taiwan Stock Exchange gained 0.4% to close at 7480.41.

[R]6:30AM European markets gained Thursday on strong banks, upbeat miners.[/R]
European markets were higher on Thursday. By mid morning, FTSE 100 in London climbed 0.3% to 6,212.3, Frankfurt Xetra Dax gained 0.2% to 6,536.59, and the CAC 40 in Paris added 0.4% to 5,499.28.

Advancers

HBOS of Britain was the main advancer in the banking sector, higher after a strong trading update. Its shares added 1.8%. Resource stocks also gained as Morgan Stanley lifted its price target on Xstrata, raising its shares 3.4%. Rio Tinto, the world second-largest mining company by market value, climbed 2 %. BHP Billiton rose 1.4%. Goldman Sachs upgraded Norsk Hydro, the Norwegian oil, gas and industrial metals group, from neutral to buy, lifting its shares 2.9%.

ABN Amro, the Dutch bank, subject of bid speculation on Wednesday, gained 1.3 %, as traders stated they expected the most likely offer would come from domestic rival ING. ING shares were up 1.5%. Porsche, the German sports car maker, gained 2.4% after HVB raised its price target, keeping its buy rating

Oil and gold

Crude oil advanced on speculation that OPEC will enforce compliance with an earlier production reduction in high inventories and mild weather in the U.S. Crude oil for January delivery gained as much as 37 cents, or 0.6%, to $61.74 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $61.67 a barrel in early trade in London. Brent crude oil gained 17 cents to $61.50 a barrel on the London-based ICE Futures exchange. Gold for immediate delivery was little changed at $628.85 an ounce in London.

Currencies

The euro gained against the U.S. dollar on Thursday, finding its feet having lost the previous day on upbeat economic news from the United States. The euro bought $1.3226 in early trading, up from $1.3204 in New York late Wednesday. The British pound strengthened to $1.9677 from $1.9660. The dollar fell to 117.33 Japanese yen from 117.52 yen.

[R]5:00AM Gold advanced on Wednesday, supported by stronger oil futures.[/R]
The most-traded February gold contract gained 70 cents to end at $632.40 a troy ounce on the New York Mercantile Exchange, while the most-active March silver closed 6.5 cents down at $13.915 after probing a high of $13.98. January platinum finished lower at $1,107.80 an ounce, down $7.20. March palladium dipped $1.20 to close at $329.70 an ounce and March copper slipped 6.15 cents to end at $3.0330 per pound.

The January crude oil added 35 cents to to end at $61.37 a barrel and the January heating oil contract rose 0.96 cent to $1.7320 a gallon. Unleaded gasoline for January delivery climbed 2.24 cents to $1.6174 a gallon. January natural gas advanced 24.3 cents to close at $7.673 a million British thermal units.

On the New York Board of Trade, March Arabica coffee futures gained 1.10 cents to end at $1.2885 a pound. Futures on raw sugar in foreign ports for March lost 0.05 cent to finish at 11.32 cents a pound.