FTSE 100 Dips on Weak Miners

Ivaylo
12 Mar, 2007
New York City

The FTSE 100 turned down after early gains on the back of hopes of more takeovers in the wake of last week

[R]9:30AM London trades lower as miners offset merger-and-activity gains.[/R]
The UK market was lower on Monday. The FTSE 100 was trading at 6,228, or 0.28% down.

Advancers

Alliance Boots surged 7.4% in response to the unprecedented 10 pounds per share offer on Friday. The board of the chemist chain is meeting today to discuss the offer. ICI is another advancer on the back of speculation that Akzo Nobel may be mulling an offer.

Hiscox was up 2.9% after stronger figures. Underwriter Hiscox posted a record 201.1 million pounds profit as claims eased as premiums soared. Lookers is up, 4.8%, after the car dealer reported a 32% increase in year profit last year to 21.4 million pounds compared with 16.4 million pounds in 2005. The firm reported strong growth across all areas of the business with turnover up 16%.

Decliners

J Sainsbury fell 2.3% though as KKR, which is backing Stefano Pessina offer for Alliance Boots, may now have too much to pursue its interest in the supermarket chain. Marks & Spencer is down 1.2% in sympathy.

Meanwhile, miners such as Rio Tinto, down 0.2% and BHP Billiton, trading flat, are off their best levels or in the red. Among the mid-caps, although housebuilder Bovis posted a 14% gain in underlying profits last year to 132 million pounds, it fell 2.9%. The firm added that housing market fundamentals remained robust.

[R]9:00AM Asian markets ended higher on Monday on Japanese exporters[/R]
Asian markets ended higher on Monday. The Nikkei average in Tokyo closed 0.8% higher at 17,292.39. Exporters benefitted from a weaker yen. Fanuc gained 1.9%, leading broad gains among machinery-related makers. Chip-equipment company Tokyo Electron advanced 1.1% after a report that the group is on track to improve its annual profit forecast by 3.8% on higher-than-expected demand. Sony added 1.3%, while Canon was up 1%. Nikko Cordial declined 0.5% though. After markets closed the Tokyo Stock Exchange, in a surprise move, said it had decided not to delist the brokerage firm.

Hong Kong Hang Seng Index finished 1.6% higher at 19,442.42. Tom Groupgained 5.4% after the media and Internet company said it would offer $201.3 million to privatize Tom Online. China Mobile gained 1.3% in Hong Kong, recovering from several days of losses. Shares of HSBC Holdings rose 0.4% in Hong Kong. The bank will see its weighting cut to 20% from about 23%. China Life Insurance and Industrial & Commercial Bank of China both gained as they were elevated to large-cap status. Shares of China Life gained 1.4% and ICBC nudged higher 0.2%.

Australia S&P/ASX 200 finished 1% higher at 5,891.00 and South Korea Kopsi finished up 1.3% at 1,441.33. Singapore Straits Times Index closed up 1.2% at 3,182.68 and Taiwan Weighted Price Index ended 0.8% higher at 7,629.15. China Shanghai Composite Index ended 0.6% higher at 2,954.91.

[R]8:00AM NY-7:00PM Mumbai Sensex ends marginally higher on strong capital goods.[/R]
The Sensex on BSE finished 17.64 points, or 0.14%, higher at 12,902.63. The market-breadth was strong as there were three advancers for every two decliners. For 1,540 stocks that advanced, 1,017 declined and only 57 remained unchanged. Of the 30 stocks in the Sensex, 18 advanced, while the rest declined. The turnover on BSE was Rs 3,417.17 crore, compared with Rs 4,339.08 crore on Friday, while on NSE, the turnover was Rs 8,331.19 crore, lower than Rs 9,641.18 crore on Friday.

Economic news

Indian industrial output in January advanced 10.9% from a year earlier. This is likely bring about more monetary tightening measures to calm demand and fight inflation. Output growth was lower than December’s revised annual 12.5%, but momentum was still intact. Output has been strong over the past few months as income levels have increased.

Minister of State for Steel Akhilesh Das said in the Lok Sabha today that the International Iron and Steel Institute has ranked India as the 7th largest steel producer in the world with an overall production of about 40 million tonnes in 2006. The minister added that the country is aiming at achieving production level of 110 million tonne by 2019-20.

Trading highlights

MindTree Consulting was the most-active stock with a turnover of Rs 436.15 crore followed by Century Textiles and Idea Cellular.

Advancers

Bharti Airtel surged 2.6% to Rs 770. TCS and Larsen & Toubro rallied around 2% each to Rs 1,238 and Rs 1,510, respectively. The L&T is seen benefiting from the government focus on the infrastructure sector in the Union Budget 2007-08. Cipla gained 1.6 to Rs 233, Wipro advanced 1.5% to Rs 793 and ONGC added also 1.5% to Rs 573. Oil and Natural Gas Corporation gained on reports it was after 49% stake in San Cristobal oil block in Venezuela.

Other advancers included Maruti, up 1.2% to Rs 797 and ICICI Bank, 1.2% higher to Rs 870. ICICI Bank announced it has no plans for a stock-split, as Chief Executive Officer KV Kamath said on Monday responding to market speculation.

Idea Cellular advanced nearly 2% to Rs 87.20. on 1.2 crore shares traded on BSE. The Idea Cellular stock debuted at Rs 92.40 on BSE on Friday It had settled at Rs 85.55 on the same day.

Decliners

Cement shares finished lower for the second straight day after Commerce Minister Kamal Nath announced on Friday cement makers had agreed not to hike prices for one year. Gujarat Ambuja Cements dropped 4.3% to Rs 105.2, ACC lost 4.2% to Rs 748 and Grasim shed 2.6% to Rs 2,014. Brokerage CLASS downgraded cement makers ACC and Gujarat Ambuja Cements to underperforms, but rated Grasim and Ultrachic as outperform.

Cigarette maker ITC plunged 3.5% to Rs 149 and HDFC Bank tumbled 3% to Rs 951. Reliance Industries ended flat at Rs 1,318. The company had made two more gas discoveries off the east coast of the country. The discoveries were made in gas-rich KG DG block in the Krishna-Godavari basin, and in NEC 25 block of the Mahamad basin. Software large-cap Infosys shed 0.4% to Rs 2,114. Reliance Energy and Reliance Communications shed 1.5% each to Rs 474 and Rs 416, respectively.

[R]6:30PM European markets advanced on Monday on bid activities.[/R]
European stocks were higher on Monday. The FTSE 100 index added 0.4% at 6,271.20, the French CAC 40 index rose 0.4% at 5,558.67 and the German DAX 30 index gained 0.5% at 6,747.85.

Advancers

Akzo Nobel surged 15.7% after it agreed to sell its Organ on Biosciences unit to Schering-Plough Corp for 11 billion euros, or $14.4 billion in cash. Shares of U.K. pharmacy chain Alliance Boots rose 6.1%, adding to the strong gains on Friday, after private equity company Kohlberg Craves offered 1,000 pence a share for the group.

U.K. supermarket operator J Sainsbury which had been linked to a private equity bid, shed 1.9% as investors speculated that KERR would not be able to afford to buy it as well. Smith & Nephew advanced 2.9% after it has agreed to buy Plus Orthopedics, a privately held Swiss firm, for $889 million in a deal that will make it the number four player in the global orthopedic reconstruction market

In mining stocks, Rio Tinto Group added 0.7%. The world third-largest mining company, said Chinese demand for metals will likely rise, underpinning high prices for commodities this year. BHP Billiton, the world largest mining company, gained 1.4%. Xstrata Plc, the world fourth- largest copper producer, added 0.9%.

Decliners

Total, Europe largest refiner, dropped 0.7%. The company completed drilling an exploration well in the Norwegian Sea without finding oil or natural gas, the Norwegian Petroleum Directorate said today. Enid Spa, Italy largest natural-gas company, fell 0.7%. MOVE AG, Central Europe biggest oil company, slid 0.5%. EON AG, whose 41 billion-euro bid for Ends SA ends March 29, lost 0.8%, leading utility shares lower.

Oil and metals

Crude oil for April delivery shed 78 cents, or 1.3%, to $59.27 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

Gold was little changed as a gain in the value of the U.S. dollar against the Japanese yen reduced the appeal of the precious metal as an alternative investment. Gold for immediate delivery was at $652.75.

Silver also fell. Silver for immediate delivery fell 1 cents, or 0.1%, to $12.93 an ounce. Platinum declined $7.50, or 0.6 %, to $1,198 an ounce.

Currencies

The euro gained the most against the dollar in three weeks as European Central Bank council member Klaus Fleischer signaled interest rates will increase further. Against the dollar, the euro traded at $1.3173 in early trade in London, from $1.3116 late in New York March 9. The currency was at 155.60 versus the yen, from 155.19. The pound rose to $1.9404 against the dollar, from $1.9320 and 229.10 yen from 228.62 in early trade in London. The currency was also little changed at 67.87 pence versus the euro.

[R]5:00AM Gold and silver futures ended lower Friday on stronger dollar.[/R]
April gold dropped $3.50 to end at $652 a troy ounce on the New York Mercantile Exchange, while May silver shed 15 cents to $12.97 an ounce. The most-active May copper contract dipped 4.95 cents to settle at $2.7840 per pound. April platinum fell $10.80 to $1,203.70 an ounce, and June palladium posted a gain of $3.35 to $356.40.

The April crude oil contract declined $1.59 to finish at $60.05 a barrel, after going up to $61.83. April heating oil settled down 4.91 cents at $1.7122 a gallon. April gasoline lost 2.40 cents to close at $1.9021 a gallon. April natural gas settled down 15.6 cents at $7.083 a million British thermal units.

On the New York Board of Trade, May Arabica coffee futures ended up 0.10 cent at $1.1250 a pound, with July up 0.05 cent at $1.1535. May futures on raw sugar in foreign ports settled down 0.07 cent at 10.52 cents a pound, with July off 0.13 cents at 10.38 cents.