London Firm Despite Miners

Ivaylo
22 Dec, 2006
New York City

Mining stocks declined in the wake of the copper demise, hitting a six-month low in Shanghai. Rio Tinto and Vedanta Resources led the decline. Vodafone fell, following its decision of a likely offer for a controlling stake in Hutchison Essar. Carnival gained for a second day on its report yesterday of better-than-expected earnings. The benchmark FTSE 100 Index gained 2.9, or less than 0.1%, at 11:47 a.m. in London. The U.K. market closes at 12:30 p.m. today.

[R]9:30AM London benchmark index nudged higher on Friday despite miners fall.[/R]
The benchmark FTSE 100 Index gained 2.9, or less than 0.1%, to 6186.10 at 11:47 a.m. in London. The U.K. market closes at 12:30 p.m. today.

Advancers

Carnival, the largest cruise operator in the world, advanced 2.6%, extending 2.9 % gain made yesterday. The company reported a 24% surge in fourth-quarter profit, topping its forecast, as demand for European trips rose.

Centrica gained 2.8% after Citigroup lifted its share-price estimate r by 26%. Forth Ports advanced 1.4%. The last publicly traded U.K. port operator announced 2006 results will top company forecasts because of higher property profits.

Monterrico Metals rallied 4.5%. The British company intending to develop a copper mine in Peru received a takeover offer from a bidder it did not identify.

Decliners

Vedanta, the largest producer of copper and zinc in India, shed 1.1%. Kazakhmys, biggest copper producer in Kazakhstan, gave up 0.9% while Rio Tinto, the world third largest mining company, shed 1.3%.

Vodafone lost 1.7%. The world largest mobile-phone operator is likely to make an approach for a controlling stake in Hutchison Essar, the fourth-biggest wireless operator in India.

Premier Foods Plc declined 5.8%. The food company that is acquiring competitor RHM stated full-year sales will be at the lower end of its guidance on increased commodity prices and energy costs.

[R]7:30AM Asia finished higher with autos advancing in Japan and utilities in HK.[/R]
Asian markets finished higher on Friday. The Nikkei 225 Index in Tokyo closed 0.3% higher at 17,104.96, its highest level since May 9. Toyota led the advance, up 1.6%, an all-time high closing price, after the auto maker announced that its production for next year is estimated to total 9.42 million vehicles, on that may exceed General Motors as the world''s No. 1 auto maker. Other advancers were steelmaker JFE Holdings, which added 0.8% and Japan''s largest non-life insurance company Millea Holdings, which gained 0.2%.

The Hang Seng Index advanced 0.5% to 19,320.52. The China Enterprises Index advanced 0.9% to 9,589.71. Utilities hog the limelight after HongKong Electric said it will increase its local tariffs 2.5% next year because of high fuel costs. HongKong Electric gained 1.1%. Although CLP Holdings stated it would not increase its tariffs, it rose 0.8%. Port-equipment maker China Communications Construction advanced 4% and Jin Jiang Hotels added 3%.

The Korea Composite Stock Price Index, or Kospi, in South Korea gained 0.1% to 1,437.49. Posco, the world''s third-largest steel maker by output, fell 1.9% after China largest steel firm Shanghai Baosteel Group agreed to a 9.5% increase in iron ore prices in 2007 with Brazil''s CVRD. Kookmin Bank gained 0.3% and Shinhan Financial Group was up 1.6%.

Shares New Zealand dropped 0.2% to 4,019.20, while Australia S&P/ASX 200 Index advanced 0.3% to 5,577.80. Singapore Straits Times Index gained 0.7% to 2,942.39 and Taiwan Weighted Price Index moved up 0.4% to 7,652.47.

[R]6:30AM European shares dipped Friday trading in a tight range before Christmas.[/R]
European markets were lower on Friday. In morning trade, London FTSE 100 was fractionally lower at 6,181.2, Frankfurt Xetra Dax fell 0.3% to 6,556.66 and the CAC 40 in Paris shed 0.3% to 5,493.96.

Advancers

Irish media group Independent News & Media advanced 2.1% having said that it expects its 2006 adjusted earnings per share to increase by more than 10% compared to a year ago. Also, engineering group Alstom advanced 2.3% on reports that it could be strike a deal for a locomotive order from China.

Decliners

Vodafone Group dipped 0.5%. The mobile company reaffirmed its interest in making a bid for a controlling stake in Hutchison Essar, the Indian mobile operator majority owned by Hutchison Telecom.

Sacyr-Vallehermoso led the Spanish construction sector lower having revealed that it had taken a five-year syndicated bank loan for 5.175 billion euros to pay for its 20% stake in Repsol, the oil company. JPMorgan gave the stock an underweight rating The broker stated Sacyr looked expensive at current valuations. The stock shed 1.7%.

Cintra, the Spanish motorway construction group, slipped 2.8%. The company, a unit of construction group Ferrovial, was downgraded earlier in the week by UBS. Ferrovial dipped 0.4%.

Oil and gold

Oil prices held below $63 a barrel on Friday after dipping from a three-month high in the previous session on unusually warm weather in the United States Northeast. U.S. crude was up 15 cents at $62.81 a barrel in early trade in London. London Brent crude rose 14 cents to $62.60 a barrel.

Gold was steady in thin trade on Friday, with many dealers already away for Christmas holidays. Gold was at $618.70/619.70 in early trading, steady near the $618.20/619.20 seen in late New York trade on Thursday.

Currencies

The U.S. dollar was trading at 118.30 yen on on Friday, down from 118.36 yen from late Thursday in New York. The euro rose to $1.3194, from $1.3175.

[R]5:00AM Gold and copper declined on Thursday on dollar and oil movements.[/R]
Gold for February delivery ended down $2.70 at $621.60 an ounce on the New York Mercantile Exchange while March silver retreated 15.5 cents, or 1.2%, to close at $12.49 an ounce. Most active March copper contract was down 7.4 cents, or 2.5%, to finish at $2.8805 a pound. January platinum lost $1.70 to end at $1,124.30 an ounce and March palladium ended off 45 cents at $327.30 an ounce.

Crude-oil futures closed under $63 a barrel Thursday, retreating on the heels of what traders considered to be a temporary set back in U.S. crude supplies. Crude for February delivery fell $1.06, or 1.7%, to end at $62.66 a barrel on the New York Mercantile Exchange. January natural-gas futures closed up 3.1 cents, or 0.5%, at $6.80 per million British thermal units. January heating oil declined 2.87 cents, or 1.7%, to close at $1.7017 a gallon. January unleaded gasoline was down 3.38 cents at $1.6421 a gallon.

March Arabica coffee finished 0.40 cents lower at $1.2635 a pound, while March raw sugar lost 0.09 cents to close at 11.90 cents a pound.