UK Gains on Banks, Miners

Ivaylo
09 Jan, 2007
New York City

Banks advanced following Credit Suisse positive comment on the sector, as the Swiss bank believes the threat from regulation, interest rates and even unsecured asset quality has diminished. A rebound in metal prices supported mining stocks as copper advanced 1% after a three-day decline. Upbeat broker comment gave also satellite TV group BSkyB a boost. BP plunged as it reported production of oil and gas fell in Q4 of 2006. By late morning, the FTSE 100 was up 0.4%.

[R]9:30AM NY – 2:30PM London UK index advances on miners and financials.[/R]
By late morning, the FTSE 100 in London gained 21.5 points, or 0.4%, at 6,215.7.

Advancers

Banks were in favor as Credit Suisse upgraded HBOS, up 3.36%, from neutral to outperform and Lloyds TSB, up 1.4%, from underperform to neutral.

Metal prices firmed as copped edged 1% higher. BHP Billiton rose 2.1%, Xstrata gained 2% and Rio Tinto rose 1.6%.

An upgrade from Morgan Stanley from equalweight to overweight helped BSkyB surge as the company rose 3.5%.

In mid-caps, shares in Rightmove, the estate agent, soared 10.2% after a well-received trading update.

Decliners

Oil large-cap BP shed 2.6 % after a worse than expected trading update. The company announced production of oil and gas declined in Q4 of 2006 to around 3.82 million barrels of oil equivalent per day compared with 4.02 million in the last three months of 2005.

Marks and Spencer succumbed to profit taking, down 1.7%, despite a firm Q3 performance with same-store sales up by 5.6%. Underlying food sales were by 3.6% higher while underlying sales of general merchandise rose by 7.1%.

Cairn Energy shed 1.6% in the wake of the disappointing listing of its Indian subsidiary, Cairn India, on the BSE and the NSE of India.

[R]7:30 AM Asian markets finish mostly higher with China surging on China Life.[/R]
Asian markets finished higher on Tuesday. The Nikkei Index in Japan ended 0.9% higher at 17,238. Mitsui Sumitomo Insurance advanced 5.4%, Millea Holdings rose 3.4% and Sompo Japan Insurance gained 3.1%. Shinsei Bank jumped 3.6% and Mizuho Financial Group closed 2.3% higher. Steelmakers rebounded after their heavy losses on Friday. JFE Holdings advanced 4.9% and Nippon Steel rose 3.3%. Sony surged 6.5%, after Goldman Sachs raised its rating on the company to buy.

In China, the Shanghai Composite Index soared 3.7% to 2,808. Expectations of improved earnings supported shares to a record closing high following several large-cap companies forecast strong growth in 2006 net profit, while Class A shares of China Life made a stronger-than-expected debut. China Life closed at 38.93 yuan ($4.98), more than double its initial public offering price.

The Hong Kong Hang Seng Index shed 0.7% to 19,898 bucking the overall trend. Ping An Insurance declined 4.3%, while PICC fell 6.6%. China Construction Bank slumped 3.5%, Bank of China dipped 2.4% and ICBC declined 2.1%. In Australia, the S&P/ASX 200 index surged 1.6% to end at 5,590. The stock market finished higher on a broad-based recovery led by resource stocks as BHP Billiton gained 3.5%, Zinifex ended 4.5% higher and Minara rose 4% despite declines in zinc and nickel prices on the London Metal Exchange.

The Kospi Index in South Korea gained 0.3% to 1,374. The stock market ended slightly higher as investors hunted for bargains in banking and construction stocks. Kookmin Bank, the largest Korean commercial bank by assets, gained 1.4%, and Hana Financial Group advanced 2.4%. Hyundai Engineering & Construction surged 4% and GS Engineering & Construction gained 4%.

[R]6:30 AM European markets advance on construction and leisure sectors.[/R]
European markets were higher on Tuesday. By mid-morning, the U.K. FTSE 100 index rose 17.2 points, or 0.3% to 6,210.60, while the German Xetra Dax gained 43.2 points, or 0.7%, to 6,651.49 and the French CAC 40 added 37.5 points, or 0.7%, at 5,566.10.

Advancers

Saint Gobain led the advancers with a gain of 5%. On Tuesday, ABN Amro upgraded its recommendation from hold to buy. Aegon rose 4%, helped by an upgrade from neutral to buy by Merrill Lynch.

Holcim was in demand for a second session in succession, gaining 2.3% following an upbeat assessment from the chief executive of the Swiss concrete maker. EADS added 1.3% on news of an order for 50 A320 aircraft from Air Asia which arrived as the market closed on Monday.

Travel stocks advanced in Europe as oil prices sank, with airline Deutsche Lufthansa rising 1.2% and Air France-KLM gaining 0.4% after posting a 3.3% rise in passengers carried in December.

Decliners

Shares in large-cap BP declined 1.7% after it said that it expects disappointing fourth-quarter results. U.K. retailer Marks & Spencer was another decliner, down 1.9% after strong recent gains. Merrill Lynch also downgraded German insurer Allianz to neutral from buy. Allianz shares lost 0.3%

Beiersdorf fell 1.6% on profit taking after the maker of Nivea skin cream reported a 7% increase in full-year sales in 2006.

Oil and gold

Crude oil declined for a second day in New York, falling below $56 a barrel, as mild weather in the U.S. cut heating fuel demand and increased stockpiles. Crude oil for February delivery fell 58 cents, or 1%, to $55.51 in after-hours electronic trading on the New York Mercantile Exchange. In London, Brent crude for February settlement declined 53 cents, or 1%, to $55.07 a barrel.

Gold rose for a second day in London on slowing sales by investment funds and increased demand from jewelers. Gold for immediate delivery rose $2.90, or 0.5%, to $612.90 an ounce in early trade in London.

Currencies

The euro retreated against the dollar. The euro was at $1.3030, from $1.3024. The yen fell to 119.17 against the dollar in early trade in London, from 118.78 late in New York yesterday. It traded at 155.28 per euro, from 154.71, after reaching a record 158.06 on Jan. 3. Against the euro, the pound was at 67.09 pence in London from 67.22 pence on Jan. 8. It also traded at $1.9418 versus the dollar, from $1.9378.

[R]5:00 AM Copper plunged to nine-month low, gold and silver gain modestly.[/R]
The most-active March copper contract plunged 0.70 cent to close at $2.5280 per pound Monday. February gold gained $2.50 to end at $609.40 a troy ounce and March silver rose 13 cents to finish at $12.36 an ounce. April platinum settled up $14.90 at $1,126.90 an ounce while March palladium declined $3 at $332.10 an ounce.

The front-month February crude oil contract lost 22 cents to close at $56.09 a barrel. Heating oil shed 0.87 cent to $1.5571 a gallon and reformulated gasoline fell 2.46 cents to $1.4685 a gallon. Natural gas advanced 19.4 cents to close at $6.378 a million British thermal units.

On the New York Board of Trade, March Arabica coffee futures finished 0.35 cent lower at $1.2010 a pound. March futures for raw sugar in foreign ports gained 0.07 cent to end at 11.16 cents a pound.