London Traces US Plunge

Ivaylo
26 Jan, 2007
New York City

The London market dropped in mid-day trade on Friday, following a sell-off overnight on US markets. Banks, mining stocks and oil large-caps all were trading in the red, only some defensive stocks made small gains. The more cautious sentiment put pressure across the board. Oil companies fell as crude prices fell below $55 a barrel. The benchmark FTSE 100 Index dropped 15.2, or 0.2%, to 6254.10 at mid-day in London.

[R]9:30AM NY-2:30PM London FTSE 100 declines as banks, miners weaken.[/R]
The benchmark FTSE 100 Index shed 15.2, or 0.2%, to 6254.10 at mid-day in London.

Decliners

Oil and mining stocks declined. BP shed 0.4% and weaker metals prices weighed on shares in the mining sector. Xstrata led the decliners, down 1.5 %. Man Group, the largest listed hedge fund in the world, fell 0.9%. Drax Group, the power company, continued its fall after several broker downgrades during the previous session. The company suffered a further decline of 2.6%. Broker comment from JP Morgan on pharmaceutical stocks sent the sector downward. Shire dipped 1.7 % and GlaxoSmithKline was 0.4% lower. Provident Financial Plc fell 0.5%,. The U.K. lender to low-income households plans to split its international division off as a separate company.

Among the small-caps and mid-caps JJB Sports fell 4 % after its founder, David Whelan, cut his stake in the retailer to 29.5% with the sale of 20.5 million shares.

Advancers

Defensive stocks advanced slightly on limited upside. Imperial Tobacco was 0.7% higher with Gallaher up 0.3%. British American Tobacco gained 1.6%. Jarvis Plc, an unprofitable U.K. rail construction company, climbed 8%, after the company won three contracts valued at a minimum of 65 million pounds, or $128 million from train-track owner Network Rail Ltd.

[R]7:30AM Asian markets closed lower on Friday on weak tech and banking shares.[/R]
Asian markets finished mostly lower on Friday. Japanese Nikkei 225 index dipped 0.21% to finish at 17,421.93. Department store Marui lost 1.77%.Kyocera fell 1.2% and Canon was off 0.5%. NEC Electronics shed 4.3% after the electronics large-cap posted a wider net quarterly loss. The Hang Seng Index in Hong Kong shed 1.9% to 20,281.13. China Construction Bank declined 2.5%, while Bank of China fell 1.5%. Guangzhou R&F Properties slipped 2.8%, Agile Property was off 3.3% and Shanghai Forte gave up 3.4%.

China bucked the downward trend, with the Shanghai Composite Index advancing 0.9% to close the day at 2,882.56. Banks surged as they are most likely to be favored by funds that subscribed to the IPO of Industrial Bank. China Minsheng Banking finished up by the daily limit of 10%, Hua Xia Bank soared 10% and Shanghai Pudong Development Bank settled 9.1% higher.

The Korea Composite Stock Price Index, or Kospi, fell 0.8% to 1,371.33. Samsung Electronics shed 2.7% and Hynix Semiconductor finished down 1.8%, on declining chip prices. Kia Motors gained 0.9%, in spite of reporting worse-than-expected Q4 results. The Weighted Price Index of the Taiwan Stock Exchange fell 1.29% to close at 7,821.32.

[R]6:30AM European stocks fell Friday on weaker chemical and industrial shares.[/R]
European markets were lower Friday. In morning trade, the U.K. FTSE 100 index retreated 0.6% at 6,231.10, German DAX Xetra 30 index dropped 0.8% at 6,667.01 and the French CAC-40 index slipped 1% at 5,554.11.

Decliners

Siemens shares declined 2% despite strong gains made Thursday after earnings while EADS lost 1.6% on reports that the U.K. government could review contracts if the company does not proceed with a planned 100 million pound investment.

Chemical company, Bayer, slipped 1.4%, and another chemical firm, Linde, lost 1.2% while Imperial Chemical Industries declined 1.1%.

Advancers

L''Oreal gained 3.9% in early Paris trading after the cosmetics company late Thursday reported that Q4 comparable sales grew 6.5%. Credit Suisse updated L''Oreal to outperform after the figures.

Carrefour shares added 0.3% after Citigroup upped the French supermarket chain to hold from sell, citing valuation. Chip maker STMicroelectronics shares advanced 0.6% after UBS upgraded the company to buy from reduce.

Oil and precious metals

Oil advanced on speculation colder U.S. weather will increase use of heating fuel. Crude oil for March delivery gained 62 cents, or 1.1%, to $54.85 a barrel in after-hours electronic trading on the New York Mercantile Exchange, and traded at $54.47 at 10:26 in early trade in London. Brent crude for March climbed 66 cents, or 1.2%, to $54.78 a barrel in electronic trading on the ICE Futures exchange, and last traded at $54.33 in London.

Gold declined for a second day in London on weakening demand from India. Gold for immediate delivery dropped 20 cents to $645.90 an ounce in early trade in London. Silver gained 3.5 cents to $13.35 an ounce, palladium added 50 cents to $348.50 an ounce and platinum advanced 50 cents to $1,173.50 an ounce.

Currencies

The dollar was mostly higher against other major currencies in European trading Friday morning. The euro was quoted at $1.2908, unchanged from late Thursday. The British pound traded at $1.9606, down from $1.9711. The dollar bought 121.42 Japanese yen, up from 120.87.

[R]5:00AM Gold and silver prices advanced Thursday on rise in oil stocks.[/R]
February gold ended 10 cents lower at $648.10 a troy ounce on the New York Mercantile Exchange. March silver gained 21.7 cents to $13.49. April platinum closed up $14.90 at $1,188 an ounce and March palladium gained $6.30 to $355.45 an ounce.The most active March copper contract added 5.30 cents to settle at $2.6545 per pound.

The front-month March crude oil contract finished down $1.14 at $54.23 a barrel. February heating oil shed 3.48 cents to $1.5491 a gallon. Front-month gasoline fell 1.75 cents to $1.4441 a gallon and February natural gas ended down 51.6 cents at $6.905 per million British thermal units.

On the New York Board of Trade, March Arabica coffee futures settled up 1.30 cents at $1.1695 a pound, with May up 1.30 cents at $1.2015. March futures on raw sugar in foreign ports settled down 0.07 cent at 10.69 cents a pound, with May off 0.05 cent at 10.88 cents.