FTSE Edges Higher, J. Matthey Rallies

Ivaylo
05 Feb, 2007
New York City

London advanced on Monday but news concerning large-caps stocks was scarce. Most stocks were trading at opening levels with only Johnson Matthey surging on an upgrade from UBS. Property stocks gained, Man Group added and BT also advanced on reports that it will secure a large contract. Of the mid-caps Countrywide led the gainers as it announced that it received a bid approach. By mid-day, the FTSE 100 gained 5.7 points to 6,316.6.

[R]9:30AM The FTSE 100 in UK gained on Monday with Johnson Matthey surging.[/R]
The UK market advanced on Monday. By mid-day, the FTSE 100 gained 5.7 points to 6,316.6. The top performer on the market was platinum producer Johnson Matthey on an update from UBS, which raised its rating on the stock from neutral to buy, citing that Johnson Matthey was the stock in focus among chemicals. Property stocks Land Securities and Hammerson were higher after reports that the finance minister is about to relax the rules on REITs. Both companies were 0.5% higher. Man Group advanced 3.7% as it said its US-listing of its Man Financial brokerage was under way. BT gained 2.4% as Dresdner Kleinwort raised its rating on the stock from hold to buy. The leading stock among the mid-caps was Countrywide, up 6.3%, as it received a new bid approach. Shareholders rejected an offer from 3i only ten days ago.

Decliners

Wilson Bowden and British Land were the only decliners on the market. Wilson Bowden proposed an offer for Barratt Developments at 2.2 billion pounds and the bid was accepted. Wilson Bowden lost 1.99% and British land bucked the uptrend in property stocks and dipped 0.2%.

[R]7:30AM Asian market finished mixed on Monday with Japan down on Nissan.[/R]
Asian markets finished mixed on Monday. The benchmark index Nikkei 225 Index in Japan finished 1.2% lower at 17,344.80. Nissan Motor slumped 8.4% after it reported a 23% decrease in Q3 net profit and reduced its full-year guidance. Toyota and Honda also declined 1.6% and 3.6% respectively. Inpex Holdings, the leading Japanese oil producer also shed 0.4%, but Nippon Oil, the largest refiner in Japan advanced 1.7%. Consumer-electronics company JVC gained on rumors that its parent firm Matsushita Electric Industrial is considering selling its stake in the JVC to a private-equity group.

In South Korea, the Kospi index edged up 0.3% to 1,417.95. Hyundai Motor declined 0.8% as its chairman was sentenced to three years in prison on fraud. In HK, the benchmark index Hang Seng Index finished 0.5% lower at 20,455.62 as traders took profits in China Mobile and HSBC. HSBC finished 0.6% lower, while China Mobile shed 0.3%. Apparel retailer, Esprit Holding bucked the trend and gained 3% after Citigroup and UBS lifted their target prices on the share. China Shanghai Composite continued its losing streak and dipped 2.3%, Australian S&P/ASX 200 shed 0.2%, while New Zealand NZSX-50 gained 0.1% and Taiwan Weighted Price Index ended 0.1% higher.

[R]6:30AM European markets traded flat on Monday on weakness in banks, autos.[/R]
European markets were flat on Monday. By mid morning, FTSE 100 in London was marginally 0.1% higher at 6,314.3, Frankfurt Xetra Dax dipped 0.2% to 6,874.6 and the CAC 40 in Paris was flat at 5,674.98.

Advancers

Irish airline company Ryanair surged 6.1% on an upbeat figures of Q3 results. The company posted a surprising 30% increase in Q3 net profit, contrary to analysts’ expectations. Oil companies gained as the price of crude oil was firm around $59 in early trading. French Total advanced 0.7%, while BP added more than 1.3%. Property groups were also stronger with Unibail of France leading the sector higher, rising 4.8% on an update to overweight from neutral by JP Morgan.

Decliners

The leading decliners were Credit Suisse, falling 1% and pulling the sector lower as ING lowered its recommendation on the stock and reduced its rating from buy to hold, which led to profit-profit. Faurecia, the largest maker of auto interior in Europe plunged 5.6% after it said its loss widened after writing down assets for a second year in a row. Faurecia led other major companies lower like Renault, down 1% and DaimlerChrysler AG, off 0.4%. Of the stocks in focus, Endesa lost 2.8% after German utility Eon submitted its renewed bid for acquiring the Spanish company, which was lower than Endesa closing price on Friday.

Oil and gold

Oil prices declined on Monday below $59 and were down 15 cents for light, sweet crude for March delivery at $58.87 a barrel on the New York Mercantile Exchange. Brent crude for March delivery on the ICE Futures exchange dipped 31 cents to $58.10 a barrel. A report of losses at metals-trading hedge fund Red Kite Management Ltd sent gold futures lower on Monday. Gold for immediate delivery fell $1.37 an ounce, or 0.2%, to $646.48.

Currencies

A decision on European interest rates later this week weighed on the euro and the 13-nation currency lost to the US dollar. The euro fetched $1.2940 in morning European trading, down from $1.2967 in New York late Friday. The British pound also declined to $1.9591 from $1.9673, while the dollar retreated to 120.74 Japanese yen from 121.07 yen.

[R]5:00AM Copper declined Friday on profit-taking. Gold and silver followed suit.[/R]
The front-month March copper contract shed 10.75 cents to finish at $2.4230 per pound, while April gold also dipped $11.50 to end at $651.50 a troy ounce. March silver declined 35 cents in line with copper and gold to $13.375 an ounce. April platinum decreased $29.30 to $1,163.50 an ounce, while March palladium declined $6.65 to $338.25 an ounce.

March crude oil contract gained $1.72 to end at $59.02 a barrel and February heating oil added 2.51 cents to close at $1.6840 a gallon. February gasoline advanced 4.76 cents to end at $1.5729 a gallon, while March natural gas dropped 5.4 cents to close at $7.476 per million British thermal units.

On the New York Board of Trade, front-month March Arabica coffee gained 1.10 cent to close at $1.1875 a pound and raw sugar futures in foreign ports for March delivery ended down 0.13 cent at 10.50 cents a pound.