Prudential Boosts FTSE

Ivaylo
29 Jan, 2007
New York City

Prudential advanced in London on Monday as the life assurer agreed the sale of Egg, its internet bank. Citigroup has agreed on the proposed price. The telecom sector declined after a profit warning from Deutsche Telekom. British Airways led the advancers as a likely strike in the company was called off, while Drax Group led the decline. In afternoon trade, the FTSE 100 was 9 points higher at 6,236.9

[R]9:30AM NY-2:30PM London FTSE 100 advances on Prudential deal.[/R]
The FTSE 100 advanced 9 points to 6,236.9 in afternoon trade.

Advancers

Banks were upbeat after the Prudential announced the sale of its internet banks Egg to Citigroup. Prudential advanced 1.6%, Amvescap also gained 1.6% and Barclays added 1%. British Airways surged, up 2.8%, as trade unions called off industrial action planned for this week. Greene King moved 0.5% higher after the pub company announced trading for the 36 weeks to January 7 had matched expectations. Reports from Barron’s, the influential US business magazine, helped FKI, the engineering group, 4.4% higher.

Decliners

Telecoms responded negatively to the warning from Deutsche Telekom. Vodafone shed 1%, BT Group edged 0.7% and Cable & Wireless eased 0.3%. SABMiller shed 1.4% as Goldman Sachs lowered its rating on the brewer from buy to neutral. Drax Group slumped, down 2.4 %, after a series of downgrades for the power generator last week. Among the mid-caps and small-caps, Debt Free Direct slumped 33.5%, Debtmatters declined 25.1%, Accuma fell 21.4%, Cleardebt eased 11.9% and Debts.co.uk gave up 10.3%.

[R]7:30AM Asian markets ended mixed Monday with China up and HK down.[/R]
Asian markets finished mixed on Monday. In Japan, the Nikkei Index finished the day 0.3% higher at 17,470. Stocks rebounded as Seiko Epson and Nomura Research Institute soared after releasing upbeat earnings results. Seiko Epson ended 5.7% higher and Nomura Research Institute surged 7.3%. Seiyu surged 13% in response to news from Wal-Mart that the biggest retailer in the world may look for corporate acquisition opportunities in Japan.

The Hong Kong Hang Seng Index ended 0.2% lower at 20,237. China-related shares surged. China Southern surged 7.3%, China Eastern Airlines rose 3.7% and Air China gained 3.1%. Property developers fell on interest-rate concerns, as Sino Land dropped 1.2%, Swire Pacific declined 1.2% and Sun Hung Kai Properties lost 0.5%. The Shanghai Composite Index soared 2.2% to 2,945. Banks led the rally. Hua Xia Bank hit the 10% upper limit, China Minsheng Banking rose 8.9% and Bank of China gained 3.1%.

South Korean Kospi Index lost 0.6% to 1,363. Samsung Electronics declined 1.5% and Hynix Semiconductor fell 3.8% on investor concerns about declining DRAM prices. Australian S&P/ASX 200 slipped 0.2% to close at 5,760. Brambles advanced 3% on broker upgrades, takeover speculation and expectations of an earnings surprise in its first half results due next month. Big banks dragged the market down with National Australia Bank losing 0.7% and Commonwealth Bank of Australia slipping 0.6%.

[R]6:30 AM European markets edged higher on Monday despite warning from DT.[/R]
European markets inched higher on Monday. By mid morning, the FTSE 100 in London inched 0.1% higher to 6,231.2, Frankfurt Xetra Dax gained 0.2% to 6,706.1, and the CAC 40 in Paris added 0.4% to 5,606.54.

Advancers

Airline stocks advanced as German airline Lufthansa gained 1.6%. Air France-KLM shares were up 1.2%, Ryanair gained 0.1% and British Airways climbed 1.2%, despite caution ahead of expected strikes by cabin crew this week. Infineon, the German chipmaker, climbed 2.6% after it reported better-than-expected results for its fiscal Q1.

Fiat gained 1.6% after a price target upgrade from JPMorgan. Financial services stocks added weight to the overall gains in the market. Danske Bank gained 2.1%, BNP Paribas added 1.2%, and Portuguese largest lender Millennium BCP rose 1.4%.

Decliners

Deutsche Telekom said it now anticipated core profit for this year to come in at 19 billion euros rather than the previous estimate of between 19.7 billion euros - 20.2 billion euros. The shares fell 5.9%. Among other telecom stocks, Dutch group KPN fell 2.4%, France Telecom lost 2%, Belgacom shed 1.5% and BT Group slid 1.3%.

Oil and gold

Light, sweet crude for March delivery gained 31 cents to $55.73 a barrel in electronic trading on the New York Mercantile Exchange. March Brent crude on the ICE Futures exchange in London rose 36 cents to $55.65 a barrel. Gold traded in London at $643.40 per troy ounce, down from $645.95 late Friday.

Currencies

The dollar was mostly higher against other major currencies in European trading Monday morning. The euro traded at $1.2916, up from $1.2910 late Friday. The British pound was quoted at $1.9570, down from $1.9588. The dollar bought 121.89 Japanese yen, up from 121.58.

[R]5:00 AM Copper and precious metals slipped Friday on dollar strength.[/R]
The most active March copper ended down 1.75 cents at $2.637 per pound while February gold also dipped $3.40 to settle at $644.70 a troy ounce. March silver finished 11.5 cents lower to $13.375 an ounce. April platinum closed $6.50 lower at $1,181.50 an ounce while March palladium settled $4.50 lower at $350.95 an ounce.

The March crude oil contract surged to an intraday high of $55.50 a barrel before finishing up $1.19 at $55.42 a barrel. February heating oil closed up 4.23 cents as well, at $1.5914 a gallon. February gasoline ended 3.93 cents higher at $1.4834 a gallon and February natural gas ended up 27 cents at $7.175 per million British thermal units.

On the New York Board of Trade, March Arabica coffee futures finished up 0.30 cent at $1.1630 a pound, while futures on raw sugar in foreign ports for March finished up 0.03 cent at 10.72 cents a pound.