FTSE Gains on InterContinental Bid Talk

Ivaylo
22 Jan, 2007
New York City

The FTSE advanced on Monday as bid speculation continued to boost InterContinental Hotels Group. The mining sector was still showing gains on bargain hunting after recent declines and firmer metal prices. But Pearson fell despite saying it was on track to post record profits for the last year. British Airways was another decliner, together with materials company Wolseley. By mid-day, the FTSE 100 gained 25.6 points, or 0.2%, to 6,262,8.

[R]9:30 AM NY-2:30 PM London The UK benchmark gains on bid talks.[/R]
By mid-day, the FTSE 100 gained 25.6 points, or 0.2%, to 6,262,8.

Advancers

InterContinental rose 2.1% as it was confirmed that David and Frederick Barclay, the millionaire owners of the Ritz hotel and the Telegraph newspaper group, had acquired a 5% stake in the hotel chain. BP gained 0.6% and Royal Dutch Shell rose 0.7% as crude rose back above $63 a barrel as winter arrived in the US.

Resolution, the life assurance consolidator, rose 1.8% on speculation that AIG of the US was considering a bid. ICI was 1% stronger as JP Morgan increased its earnings estimated for the chemicals maker and raised the price target of the stock

The mining sector gained on bargain hunting and firmer metal prices. Kazakhmys was 1.15% higher, BHP Billiton advanced 1.37%, Rio Tinto climbed 1.28% and Antofagasta traded 1.32%.

Decliners

Wolseley, the world largest supplier of plumbing goods, led the decliners, losing 1.2% as it warned that a slowing US housing market would damage its bottom line.

Confirmation from British Airways that it had received formal notice of a series of three-day strikes by its cabin crew - combined with increasing crude prices - pulled its stock 1.6% lower.

Investors book profits from Pearson after a strong trading statement capped a strong run for the shares. Pearson eased 1.9%.

[R]7:30 AM Asian markets advance Monday with HK, Shanghai and Japan leading.[/R]
Asian markets finished higher on Monday. Japan''s Nikkei Index ended 0.7% higher at 17,424. Mitsubishi Estate gained 2.4% and Mitsui Fudosan ended 2% higher. Nippon Steel advanced 2.5% and JFE Holdings added 3.7%. Among bank stocks, Mitsubishi UFJ Financial Group was 2.6% higher, Mizuho Financial Group closed 2.1% higher and Sumitomo Mitsui Financial Group advanced 1.6%.

The Hong Kong Hang Seng Index soared 2.2% to 20,772. HSBC gained 1.7% and was the most heavily traded stock, while China Mobile finished 4.3% higher on its report last Friday that it had its strongest-ever monthly subscriber additions in December. The Shanghai Composite Index surged 3.6% to 2,933. The top biggest gainers included, bus and taxi operator Beijing Bashi which surged 10%, the daily limit, and Daqin Railway which also rose 10%, while Shanghai Airlines gained 9.9%. Among retailers, Chengdu People Department Store, Beijing Wangfujing Department Store and Yinchuan Xinhua Department Store all closed 10% higher.

South Korean Kospi Index advanced 0.2% to 1,363. Shares gained on large-caps including Hynix and LG Electronics. Hynix Semiconductor advanced 2.2% on a technical rebound after a loss of 4.9% Friday. LG Electronics gained 1.7%. Australian S&P/ASX 200 gained 0.9% to close at 5,727. Strength in commodity prices powered broad-based gains in the stock market, with resources leading the charge. BHP Billiton was the biggest points contributor to the index, advancing 2.1%. Woodside Petroleum rose 2.5%.

[R]6:30 AM European shares gain Monday with auto, oil and resource stocks higher.[/R]
European markets were higher on Monday. By late morning, FTSE 100 in London climbed 0.5% to 6,266.9, Frankfurt Xetra Dax added 0.2 % to 6,758.26, and the CAC 40 in Paris gained 0.4 % to 5,639.17.

Advancers

Swatch, the world largest watchmaker, reported a 12.3% rise in 2006 sales, adding that it expected full-year operating profit to above average

Austrian bank Raiffeisen International gained 2.8% after Morgan Stanley raised its price target, saying it had underestimated the bank asset growth potential.

DaimlerChrysler led the auto sector higher after JPMorgan raised its price target keeping its overweight rating.

German car parts maker Continental gained 2.1% after Merrill Lynch lifted its target price in expectation of capital restructuring in the coming months.

Philips shares rose 1.6% in Amsterdam after the company said its fourth quarter net profit more than doubled on comparable sales growth of 2%.

Credit Suisse rose 0.4% after it said that it intends to return up to 8 billion Swiss francs to its shareholders over three years.

Oil stocks were higher too. Norway Statoil gained 1.7%, while Austrian OMV added 1.6% and Royal Dutch Shell climbed 0.8%.

Decliners

British Airways were trading down 1.7% after it said it was notified by the Transport and General Workers Union that British Airways employees who are members of the TGWU cabin crew branch will be called upon to take part in a series of strikes.

Oil and gold

Crude oil advanced for a second day in New York on speculation that cold weather in the northeastern U.S. will increase consumption. Crude oil for February delivery rose $1.06, or 2%, to $53.05 a barrel, in after-hours electronic trading on the New York Mercantile Exchange. Brent crude for March settlement gained 69 cents, or 1.3%, to $54.13 a barrel in electronic trading on the ICE Futures exchange and was at $53.97 in London. Gold traded in London at $635.10 per troy ounce, up from $632.00 late Friday.

Currencies

The dollar rose against other major currencies in European trading Monday morning. The euro traded at $1.2949, down from $1.2965 late Friday. The British pound traded at $1.9730, down from $1.9737. The dollar bought 121.60 Japanese yen, up from 121.29.

[R]5:00 AM Gold and silver advance on Friday supported by stronger crude oil.[/R]
February gold gained $8.30 to close at $636.40 a troy ounce and March silver advanced 23.5 cents to finish at $12.92 an ounce. April platinum settled flat at $1,168.50 an ounce, while March palladium closed the session up $1.50 at $344.90. The most-active March copper contract added 2.50 cents to finish at $2.5170 per pound on the New York Mercantile Exchange.

February crude oil reached $52.05 a barrel before ending up $1.51 at $51.99 a barrel. February heating oil also gained 4.28 cents to end at $1.5135 a gallon. February gasoline settled up 4.27 cents at $1.3980 a gallon and February natural gas advanced 56.2 cents to finish at $6.886 a million British thermal units.

On the New York Board of Trade, the March Arabica coffee futures contract settled down 0.05 cent at $1.1970 a pound. March futures on raw sugar in foreign ports gained 0.15 cent to close at 10.86 cents a pound.