FTSE Hovers at Six-Year High

Ivaylo
25 Jan, 2007
New York City

The FTSE 100 advanced to a six-year high in morning trade on Thursday on strong oil and banking stocks. Declines in electricity companies, though, made the benchmark index give up some of the gains. Friends Provident and Aviva surged on the back of strong performance from Legal & General overnight in New York. Oil large-caps also rallied on stronger crude prices with BP and Royal Dutch Shell both gaining. By midday the FTSE 100 was 6 points, or 0.1% higher at 6,321.1.

[R]9:30AM NY-2:30PM London UK benchmark index gains Thursday on oil, banks.[/R]
By midday the FTSE 100 in London advanced 6 points, or 0.1% at 6,321.1.

Advancers

Insurer Legal & General helped London counterparts. It reported a 42% increase in worldwide new business and guided double digit growth in the UK life assurance market in 2007, buoying Friends Provident to rise 0.4% to 227p and Aviva to gain 0.1%.

The US is to increase the size of its strategic petroleum reserve and that supported oil companies as crude prices advanced. BP rose 0.6% and Royal Dutch Shell was up 0.6%.

The property sector also advanced after broker comment from JP Morgan. The bank upgraded the sector from neutral to overweight resulting in advances in British Land, up 1.2%, Liberty International 0.2% higher and Hammerson rising 0.8%.

BT Group was 0.3% firmer after ABN Amro increased its rating on the stock to hold from sell and raised the price target on the stock.

Decliners

British Airways said that talks with cabin crew unions failed and that news sent the shares of airline lower 0.6%.

Drax Group broke its strong winning streak as hopes that the cold spell in the UK would lift its earnings. The biggest coal-fired power station in Europe was also downgraded by JP Morgan to underweight from neutral and slipped 2.4%.

Unilever, consumer products producer shed 0.4% on worries over weakness in the food sector before its Q4 results, due next Thursday.

[R]7:30 AM Japan leads Asian stocks lower Thursday on falling exports.[/R]
Asian markets ended mostly lower on Thursday. The Nikkei 225 Index in Japan closed 0.3% lower at 17,458.30. Toyota shares fell 1.7%. Sony gained 1.6% as market talk is growing that the company will launch an IPO of its Sony Financial unit. Shares of shipping line Kawasaki Kisen Kaisha and other domestic-related issues such as Nippon Steel were higher, bucking the trend. In Tokyo currency trading the U.S. dollar was quoted at 120.40 yen, compared to 121.15 yen in late New York

Hong Kong Hang Seng Index fell 0.7% to 20,669.83. China Mobile, the second-biggest Hong Kong large-cap by market capitalization, declined 2% as investors took profits following recent gains. China Life Insurance shed 2.9%, tracking a 4.9% decline. The Shanghai Composite Index slipped 2.6%. The Chinese government announced that the economy expanded faster than forecast in Q4, bringing full-year growth to 10.7%, its fastest pace since 1995.

Taiwan Weighted Price Index dipped 0.15% to 7,923.77 and South Korean Kospi index shed 0.05% to 1,382.36. Australian ASX/S&P 200 rose 0.02%, New Zealand NZSX-50 rose 0.04% and the Composite Index in Malaysia declined 0.1%.

[R]6:30 AM European markets advance Thursday on strong tech sector.[/R]
European markets were higher Thursday. By mid morning, the FTSE 100 in London climbed 0.2% to 6,324.2, Frankfurt Xetra Dax added 0.2% to 6,761.93, and the CAC 40 in Paris gained 0.1% to 5,643.37.

Advancers

Nokia, the Finnish mobile phone maker, posted a better-than-expected 19% increase in Q4 net profit on strong growth in emerging markets.

Pernod Ricard, the French drinks group, advanced 6.2% after it reported a 7.3% growth in first-half net profit thanks to growth in its prestige brands.

Siemens posted a better-than-expected increase in sales and operating profit in its fiscal first quarter. The shares gained 6%.

Swedish clothing retailer Hennes & Mauritz rose 5.2% after it said that its Q4 pretax profit rose 27%, above the expectations of the analysts for a profit.

Decliners

Air Liquide fell 2.1% after a sharp drop in natural gas prices and the strength of the euro contributed to a 0.9% drop in Q4 sales.

U.K airline British Airways slipped 1.4% after the company said that cabin crew members of the Trade Union will stop work for 48 hours starting Jan. 30.

Oil and gold

Crude oil prices dropped in Asian trading Thursday after rising overnight to a two-week high. Crude oil for March delivery dropped 32 cents to $55.05 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude for March dipped 17 cents to $55.26 a barrel on the ICE Futures exchange in London. Gold opened Thursday at a bid price of $646.57 a troy ounce, up from $641.40 late Wednesday.

Currencies

The dollar fell against other major currencies in European trading Thursday morning. The euro traded at $1.2980, up from $1.2961 late Wednesday. The British pound was quoted at $1.9691, up from $1.9672. The dollar bought 120.56 Japanese yen, down from 120.95.

[R]5:00AM Gold and silver advanced supported by the recovery of oil stocks.[/R]
February gold futures ended up $2.30 at $648.20 a troy ounce on the New York Mercantile Exchange while March silver gained 1.3 cents to settle at $13.273. April platinum finished down $10.10 at $1,173.10 an ounce and March palladium lost $1.20 to $349.15. The most-active March copper contract ended up 2.20 cents at $2.6015 per pound

The front-month March crude oil contract advanced 33 cents to close at $54.37 a barrel. February heating oil also ended 0.76 cent higher at $1.5839 a gallon. Front-month gasoline rose 1.43 cents to $1.4616 a gallon and February natural gas closed down 17.6 cents at $7.421 per million British thermal units.

On the New York Board of Trade, the March Arabica coffee contract finished up 1.30 cents at $1.1695 a pound, with May gaining 1.30 cents to end at $1.2015. Futures on raw sugar in foreign ports for March declined 0.03 cent to close at 10.76 cents a pound, with May down 0.01 cent to 10.93 cents.