Miners Pull FTSE down

Ivaylo
30 Jan, 2007
New York City

The FTSE was lower by mid-day on Tuesday as weakness in the mining sector remains the dominant feature with copper prices volatile and an uninspiring production statement from Kazakhmys unsettling its rivals as well. Other miners were also week including Vedanta, Antofagasta, Xstrata and Lonmin. Corus is one of the advancers as the auction between Tata and CSN draws to a conclusion later today. In the wider market, the FTSE 100 shed 18.6 points to 6,221.5.

[R]9:30AM NY-2:30PM London FTSE declines on weak performance by miners.[/R]
The FTSE 100 in London declined 18.6 points to 6,221.5 by mid-day on Tuesday.

Advancers

News that Sanofi-Aventis of France and Bristol-Myers Squibb of the US were in talks over a possible merger lifted the pharmaceutical sector. AstraZeneca gained 0.8%. British Airways advanced 1.6% on continued relief that the proposed strike has been called off.

Takeover talks continued to buoy food and drinks group Cadbury Schweppes, up 1.5%, and J Sainsbury, 0.8% higher. Woolworths, the retailer, gained 2.3% after it said it struck a deal to supply music, DVDs, games and books to Virgin Retail. Mortgage provider Kensington announced underlying profits increased by 17% to 65.2 million pounds last year, but it added that tough competition will result in slower profit growth this year. Its shares advanced 2.68%.

Decliners

Kazakhmys led the decliners in the mining sector, down 2.2%, despite posting a 9% rise in copper cathode production. Other miners also declined. Vedanta Resources shed 1.4%, Lonmin fell 1.5%, Xstrata retreated 1.3% and Rio Tinto dropped 1.1%.

Among mid-caps PZ Cussons shed 4%. The soap maker posted a 4.5% rise in first-half profit before tax and stated its guidance remained positive despite the impact of the continued weak dollar. IT software and services company EG Solutions announced it expects revenues to be up to 500,000 pounds lower than market expectations, resulting in a pre-tax loss for the year. Its shares plunged 27.33%.

[R]7:30AM Asian markets advance Tuesday with exporters leading gainers.[/R]
Asian markets mostly advanced on Tuesday. Japanese Nikkei Index ended 0.1% higher at 17,490. Japan Airlines rose 1.2%. Semiconductor companies and auto stocks enjoyed a good run, as Kyocera advanced 1.6% and Honda Motor moved up 1.5%. Sony closed 1.7% lower, though. After the closing bell, the company announced on Tuesday its group net profit declined 5.3% in October-December from a year earlier, on losses at its games division.

The Hong Kong Hang Seng Index advanced 1.1% to 20,460. China Travel International Investment soared 22% after JPMorgan issued an upbeat report on the stock, and Property developer Cheuk Nang Holdings surged 28% ahead of book closing on Thursday on a bonus warrant issue. The Shanghai Composite Index, however, lost 0.5% to 2,931. Property firms pulled the stock market lower on concerns there will be more government moves to restrict growth in the sector. China Merchants Property Development dipped by the daily 10% limit and Poly Real Estate Group shed 8.3%.

South Korean Kospi Index advanced 0.6% to 1,371. Hyundai Marine & Fire Insurance gained 4.8%, while Samsung Fire & Marine Insurance added 2.2% ahead of its Q3 results. Korea Exchange Bank gained 2.1% ahead of Q4 earnings due in February. Australian S&P/ASX 200 ended 0.9% higher at 5,813. Takeover activity continued to aid the market, with Veda Advantage and Symbion Health being the latest targets. Veda Adavantage advanced 18% after receiving a takeover approach from a private equity consortium, and Symbion Healthcare soared 10% on news of a takeover approach from Primary Health Care.

[R]6:30AM Europe was lower on Tuesday on losses in banks and telecoms.[/R]
European markets declined on Tuesday. In early trade, the FTSE 100 in London shed 0.3% to 6,2238, Frankfurt Xetra Dax was little changed at 6,724.37, and the CAC 40 in Paris fell 0.2% to 5,609.54.

Advancers

Air France-KLM, which has cross-shareholdings with Alitalia, gained 3.6% after it said the conditions were not right for a bid. Lufthansa, which on Monday was upgraded by JPMorgan, gained 1.4%, and budget carrier Ryanair added 1.4%. Alitalia jumped 3.3% after receiving 11 expressions of interest. The deadline for first-round offers ended yesterday.

Decliners

The worst performing sectors were basic resources like oil groups and mining stocks as prices fell on commodity markets. Norway Statoil fell 1.2 %, while Austrian OMV lost 0.5% and Italian Eni lost 0.4%. London-listed mining stocks added to the losses as metals prices fell. Kazakhmys lost 2.4%. Steelmakers were also lower, with French steel pipe maker Vallourec off 1.2%, and German ThyssenKrupp down 0.6%.

Oil and gold

Crude oil for March delivery rose 40 cents, or 0.7%, to $54.41 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The contract traded at $54.27 in early trade in London. Brent crude for March gained 47 cents, or 0.9%, to $54.15 a barrel in electronic trading on the ICE Futures exchange and last traded at $53.98 in London.

Gold for immediate delivery in London fell $2.40, or 0.4%, to $641.30 an ounce, and traded $642.50 in early trade.

Currencies

The 13-nation euro rose slightly against the U.S. dollar Tuesday ahead of a meeting of the U.S. Federal Reserve that could set the tone for future interest rate hikes. In morning European trading, the euro bought $1.2960, compared with $1.2956 late Monday in New York. The British pound rose to $1.9675 from $1.9595, while the dollar fell to 121.92 Japanese yen from 121.94 yen.

[R]5:00AM Precious metals declined on Monday on technical selling.[/R]
The most-active March copper lost 9.5 cents to end at $2.5420 per pound and the most-active February gold ended down $1.50 at $643.20 an ounce. March silver shed 12.5 cents to settle at $13.25 an ounce. April platinum finished $6.80 lower at $1,174.70 an ounce while March palladium declined $6 to close at $344.95 an ounce.

The front-month March crude oil contract lost $1.41 to end at $54.01 a barrel. February heating oil declined 4.25 cents to end at $1.5489 a gallon. Front-month gasoline settled down 4.24 cents at $1.441 a gallon and February natural gas dropped 25.8 cents to close at $6.917 per million British thermal units.

On the New York Board of Trade, March Arabica coffee futures gained 0.30 cent to settle at $1.1660 a pound, with May up 0.30 cent at $1.1980. Futures on raw sugar in foreign ports for March finished 0.13 cents lower at 10.59 cents a pound, with May off 0.12 cent at 10.80 cents.