FTSE 100 near Six-Year High

Ivaylo
19 Feb, 2001
New York City

The FTSE 100 is trading in positive territory on Monday near a six-year high on reports of new bid interest in J Sainsbury and expectations for a $4 billion capital return from Anglo American. Anglo American leads the advancers ahead of its full year results due on Wednesday. Lloyds TSB gained on a possible sale of one of its assets. Utilities were leading the decliners. The benchmark index, the FTSE 100, was up 29 points at 6,448.4, its highest level since November 2000.

[R]9:30AM London was near six-year high on Monday on bid talks, mining stocks.[/R]
The UK market was higher on Monday. The benchmark index, the FTSE 100, was up 29 points at 6,448.4, its highest level since November 2000.

Advancers

Reportedly, Anglo American will announce tomorrow a $4 billion share buyback together with a sharp increase in profits. The news sent its shares higher and the stock gained 2.6%, further lifted by reports that Polyus Gold of Russia could be interested to buy the stake of Anglo American in Anglo Gold. The rest of the sector also moved higher, with Lonmin up 2% and Kazakhmys 2% higher.

Interest from a private equity company boosted supermarket group Sainsbury, higher 2%. There are reports that an investment fund supported by the Qatari government was set to raise its stake in the retailer. There are also news that other reports suggested that the Qatari group had approached Stuart Rose, head of Marks & Spencer, about a combined bid for Sainsbury.

News of potential deals of banks also supported shares. Barclays made gains of 0.3% ahead of full-year results due Tuesday on reports that it was considering selling its credit card operations targeted at risky borrowers. Lloyds TSB, considering the potential disposal of its Abbey Life insurance business, rose 0.4%.

Decliners

On the downside, United Utilities shed 1.8% as Goldman Sachs reduced its rating on the company from neutral to sell. Other decliners were also connected with broker comment. ING downgraded shares in Centrica, down 0.1%, to hold from buy and kept its price target unchanged, while Citigroup chopped shares in publisher Reed Elsevier, down 1.65%, to hold from buy.

[R]8:30AM Asian markets finished mostly higher Monday.[/R]
Asian markets ended mostly up on Monday. China, Taiwan, South Korea and HK were all closed. Many markets across the region were closed for the Lunar New Year. The market in South Korea reopens Tuesday, while HK, Singapore and Malaysia on Wednesday. In Japan, the Nikkei 225 index ended at 17940.09, with a gain of 0.36%. Toyota Motor was a leading decliner, finishing 0.5% lower. Ichigo Of mergers, Asset Management announced it has secured almost enough shareholder votes in support of its bid to block Tokyo Kohtetsu merger with Osaka Steel Co. through a share swap and seek a better swap ratio for shareholders. The position of Mitsui, Kohtetsu main shareholder is not clear yet. Mitsui closed 1.5% higher. Investors in Japan, in Asia and around the world will be awaiting Tuesday and Wednesday when the Bank of Japan holds a regular meeting to review interest rates.

The other two major stock exchanges that traded today finished mixed. Australian S&P/ASX 200 ended with a 0.61% gain to 5,990.10, while New Zealand NZSX-50 lost 0.94% to close at 4,140.21.

[R]6:30AM Europe advances Monday on bid perspectives from DaimlerChrysler.[/R]
European stocks were higher on Monday. In early trade, Frankfurt Xetra Dax added 0.3% to 6,980.81, the CAC 40 in Paris gained 0.2% to 5,725.23 and London FTSE 100 climbed 0.3% to 6,436.5.

Advancers

DaimlerChrysler gained 3.4% after reports it had received expressions of interest for its Chrysler unit. As potential bidders for the Chrysler unit emerged General Motors and Hyundai, should the German parent company put it up for sale. Other auto stocks were also making progress, with Peugeot shares up 1.4% in France after UBS upgraded the company to neutral from reduce and BMW shares up 1.5% in Germany. Sainsbury shares were up 2% on talk state-owned private equity group Qatar Investment Authority was considering investing in the UK third largest supermarket group. France Carrefour gained 2.6%. Mining shares, which mostly trade in London, were generally higher on Monday as gold prices stayed firm. Rio Tinto shares rose 0.9% and BHP Billiton shares climbed 0.7%.

Decliners

Shares in Norwegian oil and aluminum producer Norsk Hydro slipped 1.2%. The company announced on Monday that Q4 net income fell to $216 million from due to a write-down of $836 million related to its Front Runner field and nine shelf fields in the Gulf of Mexico.

Oil and gold

Oil slipped on Monday to around $59 a barrel, pressured by expectations for warmer weather in the United States and supported by threats to supply in Nigeria. U.S. crude for March delivery was down 30 cents at $59.09 a barrel at 1042 GMT. London Brent crude for April was trading down 4 cents at $58.91 a barrel. Gold opened Monday at a bid price of $671.00 a troy ounce, up from $664.30 late Friday.

Currencies

The euro was little changed Monday against the U.S. dollar on a day that U.S. markets were closed for the President''s Day holiday. In morning European trading the euro bought $1.3138, barely up from $1.3137 in New York late Friday. The pound fell to $1.9501 from $1.9511 as disappointing British retail sales continued to weigh on the currency. The yen remained strong, buoyed by news of strong Japanese economic growth and rising sentiment the country''s central bank would likely raise its key interest rate from 0.25 % later this week. The dollar bought 119.63 yen -- compared with 119.26 on Friday.

[R]5:00AM Gold and silver gained on Friday on stronger oil futures.[/R]
April gold gained $1.40 to $672.80 a troy ounce on the New York Mercantile Exchange, while March silver advanced 2.8 cents to end at $13.99 an ounce. April platinum settled down $6.50 at $1,210.40 an ounce, and March palladium slipped $1 to end at $341.80 an ounce. March copper declined 1.95 cents to close at $2.6445 per pound.

The front-month March crude oil futures contract advanced $1.40 to finish at $59.39 a barrel, a sharp recovery from its intraday low of $57.59 a barrel. March heating oil ended up 4.63 cents at $1.6734 a gallon, while March gasoline settled up 4.81 cents at $1.6453 a gallon. March natural gas added 21.0 cents to finish at $7.503 a million British thermal units.

On the New York Board of Trade, Arabica coffee futures dipped to $1.13 a pound, a three-day low. The March contract closed down 2.10 cents at $1.1320 a pound, with May was off 1.85 cent at $1.16. Futures on raw sugar in foreign ports for March gained 0.02 cent to end at 11.13 cents a pound, with May down 0.05 cent at 10.80 cents.