UK Shares Decline, Property Stocks Gain

Ivaylo
29 Dec, 2006
New York City

Volumes traded on the market were expectedly low as investors took profits from some of the gains posted this week. Utilities declined with Scottish & Southern Energy leading the way. Financials such as Northern Rock and Royal & Sun Alliance were also lower, while property groups Persimmon, Land Securities and Hammerson advanced. The benchmark FTSE 100 Index in London lost 20.1, or 0.3%, to 6220.80.

[R]9:30 AM London declined on Friday in thin trade on weak gas and oil stocks.[/R]
The FTSE 100 Index in London shed 20.1, or 0.3%, to 6220.80.

Advancers

Property groups shone again on their movement to real estate investment trust status on January 1, which should yield tax benefits. Persimmon, Land Securities and Hammerson were higher, 1.06%, 0.26% and 0.13% respectively. Amvescap Plc, owner of Aim and Invesco funds, gained 1.5%.

Decliners

BP, the second-largest oil company in Europe, shed 0.7%. Shell slipped 0.4%. The decline can be attributed to crude oil drop due to milder-than-average U.S. temperatures which outweigh concern about diminishing inventories in the US.

Vedanta Resources, the largest copper and zinc producer of India, gave up 0.3%. Copper futures in Shanghai were virtually unchanged on worries that high stocks and slowing economic growth in the U.S. and China will extend a three-month losing streak.

Scottish & Southern Energy declined 1.58% and financial stocks Northern Rock and Royal & Sun Alliance also declined, 0.76% and 1.13% respectively.

PartyGaming Plc dropped 0.8%. The biggest Internet poker company in the world has struck a deal to buy gambling Web sites from Empire Online Ltd. and Intercontinental Online Gaming Ltd.

[R]7:30 AM Asian markets finished higher with Japan, Australia leading advance.[/R]
Asian markets ended higher on Friday. Japanese benchmark Nikkei 225 stock index ended up 0.01% to finish a half-day session at 17,225.83. Exporters such as Matsushita Electric Industrial, Toyota Motor and Nissan Motor led the advance, as the yen recent weakness buoyed traders to buy autos and electronics. Matsushita Electric gained 1.93%, Toyota reported a 0.51% gain and Nissan added 0.85%. Steelmakers also finished higher, with Nippon Steel gaining 1.03%. Canon, the largest maker of digital cameras in the world, rose 0.8%.

In Australia, stocks reached a record high as traders squared positions with some month-end buying in large-cap stocks that did not do well in the market during the year. The benchmark S&P/ASX 200 index gained 0.2% to end at 5,669.9 on strong gains in financials and property trusts. Westfield Group, the largest operator of shopping malls in the world, made the biggest contribution to the overall market, increasing 1.1%.

In China, shares surged to a new record high for a fifth consecutive day, boosted by sharp increase in bank and airline stocks. The Shanghai Composite Index advanced 4.2% to close at 2,675.47. Bank and airline stocks were lifted by an increase in the yuan against the dollar. Air China and China Southern Airlines advanced by the daily limit of 10%, while Shanghai Airlines rose 8.5%. Bank of China soared 9.9% and Industrial & Commercial Bank of China added 6%. BOC has gained 36% and ICBC 31% this week.

Hong Kong bucked the uptrend, closing lower on profit-booking in Chinese banks and index large-caps. The Hang Seng Index shed 0.2% to 19,970.88, while the Weighted Price Index of the Taiwan Stock Exchange advanced 1.2% to end at 7823.72.

[R]6:30 AM European markets were almost flat Friday as traders take to the sidelines.[/R]
European markets were nearly flat on Friday. By mid morning, London’s FTSE 100 shed 0.2% to 6,226.8, Frankfurt’s Xetra Dax was virtually unchanged at 6,609.2 and the CAC 40 in Paris gained 0.1% to 5,539.64.

Advancers

ABN Amro was in early focus. Its shares moved 0.1% higher after it said late Thursday it was reducing 900 jobs at its LaSalle operations in Chicago. ABN added that the move was part of a plan to cut expenses and enhance the operational performance of businesses in mature markets such as the U.S.

Although ABN Amro was much talked about, it was Suez which led the gainers, up 3.1%, following market talk of a bid for the French utility. Rumors that French billionaire Francois Pinault was considering a 70 billion euros bid spurred little response from Suez, save for declining to comment on market speculation.

Ferrovial, Spanish construction group, was another advancer, gaining 1.2% as it announced on Thursday night it had sold its property division for 1.6 billion euros to unlisted Promociones Habitat.

Decliners

As oil prices failed on Thursday to respond to the much larger than expected depletion in US crude stockpiles had a negative impact on energy stocks. BP shed 0.8%, while Royal Dutch Shell dipped 0.8 %. Repsol of Spain slipped 0.7%.

Credit Agricole was another decliner in Paris, shedding 0.4%, as it said it was about to issue 4 billion euros in cheaper shares to finance the acquisition of 663 Italian bank branches, including 202 branches of Banca Intesa.

Oil and gold

Oil prices retreated toward $60 a barrel on Friday on account of the unusually mild weather which reduced trade. U.S. crude oil futures shed nine cents to $60.44 a barrel in early trade in London. Brent crude gave up two cents to $60.65. Gold opened Friday at a bid price of $634.10 a troy ounce, up from $633.50 late Thursday.

Currencies

The euro traded a little higher on Friday versus the dollar, which slipped in spite of better-than-expected U.S. economic data the previous day. The euro bought $1.3163 in morning European trading, up from $1.3146 in New York late Thursday. The British pound, however, slipped to $1.9613 from $1.9628. The dollar was little changed against the Japanese yen, slipping to 118.90 yen from 118.93 yen

[R]5:00 AM Gold and silver end higher on Thursday, supported by weaker dollar.[/R]
At settlement, the top-traded February gold contract gained $6.60 to close at $636.90 a troy ounce on the New York Mercantile Exchange. March silver advanced 1.5 cents to end at $12.94 an ounce, after fund buying combined with selling at the high levels to keep the advance contained. January platinum added 50 cents to finish at $1,116.20 an ounce, while March palladium dipped 95 cents to close at $327.95 an ounce. March copper shed 1.9 cents to end at $2.8950 a pound.

On the Nymex, crude oil futures gained slightly following a report that displayed a surprisingly large fall in U.S. crude stocks. The February crude oil contract advanced 19 cents to $60.53 a barrel. January heating oil was up 1.43 cents to close at $1.6231 a gallon, and January unleaded gasoline slipped 0.54 cents to finish at $1.5821 a gallon. Natural gas for delivery in February added 10.6 cents to $6.248 a million British thermal units.

On the New York Board of Trade, Arabica coffee futures closed sharply down after an intraday rise attempt was thwarted by producer selling, year-end profit-booking and book-squaring. March coffee ended 3.9 cents lower at $1.2500 a pound, near the bottom of the trading range of the day of $1.2450 a pound to $1.2975 a pound.

Futures on raw sugar in foreign ports ended slightly higher. The market was aided by speculative and local buying, but producer and trade selling curtailed the ascent. March sugar futures ended 0.07 cents higher at 11.86 cents a pound.