UK Leads Decliners in Europe

123jump.com Staff
09 Jan, 2008
New York City

Marks & Spencer declined 19% after its third quarter same store sales ending on Dec 29 fell 2.2%. Tesco, Next Plc and other UK retailers declined in sympathy. StatoilHydro fell 3% after it said that production at its LNG plant may not meet its earlier target due to start up problems. Siemens in Frankfurt trading fell 5% after investors speculatd that it may not meet its earnings target.

[R]5:00PM New York, 11:00PM Frankfurt, 9:00AM next day Sydney[/R]

European Markets

In London FTSE 100 Index closed lower 83.80 or 1.32% to 6,272.70, in Paris CAC 40 Index decreased 60.25 or 1.10% to close at 5,435.42 and in Frankfurt DAX index lower 67.28 or 0.86% to close at 7,782.71. In Zurich trading SMI closed higher 23.42 or 0.28% to close at 8,339.81.

North American Markets indexes

Dow Jones Industrial Average closed up 146.24 or 1.16% to a close of 12,735.31, S&P 500 closed up 18.94 or 1.36% to 1,409.13, and Nasdaq Composite Index traded up 34.04 or 1.39% to a close of 2,474.55.

In Toronto TSX Composite rose 38.19 or 0.47% to close at 13,579.94.

Of the 30 stocks in Dow Jones Industrial Average, 24 closed higher, 6 closed lower, and none was unchanged.

DuPont led the gainers in the index with a rise of 4.75% followed by increases in Microsoft of 3%, in Hewlett Packard of 2.9%, in Coca Cola of 2.7%, and in American Express of 2.4%.

General Motors led the decliners in the index with a fall of 2.2% followed by losses in Disney of 1.24%, and in AT&T of 0.4%.

Of the stocks in S&P 500, 338 closed higher, 157 fell, and five were unchanged.

Twenty five stocks fell more than 3% and seventy two stocks rose more than 3%.

Unisys led the decliners in the index with a fall of 14% followed by losses in Circuit City of 11%, in Advanced Micro Devices of 7.9%, in CenturyTel of 7.4%, and in Countrywide Financial of 6.4%. Countrywide lost 29% in yesterday’s trading.

Apollo Group led the gainers in the index with a rise of 16% followed by increases in VF Corp of 8.5%, in SLM Corp of 7.8%, in E*Trade Group of 6.7%, in First Horizon of 6.3%, and in CIT Group of 6.1%.

South American Markets Indexes

In Latin Markets Chile led the decliners in the region with a fall of 2.59% followed by decreases in Argentina of 2.40%, in Peru of 2.06%, in Colombia of 0.65%, and in Venezuela of 0.6%.

Brazil led the gainers with a rise of 0.96% followed by increases in Mexico of 0.47%.

Asian Markets

In Tokyo Nikkei 225 Index closed higher 70.49 or 0.49% to 14,599.16, in Hong Kong Hang Seng index increased 502.95 or 1.86% closed to 27,615.85, in Australia ASX 200 index higher 46.20 or 0.74% to close 6,159.50.

In South Korea Kospi Index increased 18.24 or 1.00% to close at 1,844.47, in Thailand SET index closed higher 8.78 or 1.08% to 820.47, and Indonesia JSE Index edged increased 44.64 or 1.60% to 2,830.26. Sensex index in India closed lower 3.55 or 0.02% to 20,869.78.


Bond Yields increased on 10-year U.S. bonds to 3.79% and 30-year bonds increased to 4.34%.

[R]Commodities, Metals, and Currencies[/R]

Crude oil rose $1.18 to close at $96.270 per barrel for a front month contract, natural gas increased 6 cents to $7.94 per mBtu, and gasoline futures increased 4.02 cents to close at 247.000 cents per gallon.

Gold increased $1.40 in New York trading to close at $881.70 per ounce, silver closed up 2.5 cents to $15.84 per ounce, and copper for front month delivery increased 1.50 cents to 328.35 per pound and in London copper futures decreased $325.50 to $7,203.00.

Dollar edged lower against euro to $1.466 and lower to 109.990 yen.


[R]12:30PM New York – Aegean Marine declined 15% after a secondary offering and expansion of its marine network.[/R]

Dow Jones Industrial Average rose 49.58 to 12,640.77, Nasdaq increased 7.81 to 2,448.61, S&P 500 gained 4.76 to 1,394.95.

Aegean Marine Petroleum Network fell nearly 15% or $4.94 to $30.37 after it said that it has taken a delivery of tanker.

Amorgos, a 4,600 dwt newly built double-hull bunkering tanker from Fujian Southeast Shipyard in China. The Amorgos is expected to operate out of the Company''s service center located in Gibraltar.

Aegean ((ANW)) successfully completed a secondary offering of 6.750 million shares at $37.75 on November 14th, 2007. Since then the company stock has declined 20% to $30.42 after reaching a high of $47.75 on October 18, 2007.

Leveret International Inc., which is controlled by Aegean''s founder, Dimitris Melisanidis, and John P. Tavlarios, Director, are expected to sell an additional 872,275 shares of the Company''s common stock, resulting in an aggregate of 7,622,275 shares of common stock sold by the selling shareholders in connection with this offering. The Company will not receive any proceeds from the shares of common stock sold by the selling shareholders.


[R]11:00AM New York – MBIA fell sharply after it plans to raise $1 billion in capital.[/R]

MBIA ((MBI)) fell 11% or $2.39 to $11.64 after it said that it will cut dividend to 13 cents from 34 cents.

MBIA will raise $1 billion to meet capital requirements of rating agencies to maintain AAA rating. The notes are callable at par at the Company’s option on the fifth anniversary of the date of issuance and every fifth anniversary thereafter.

The press release added that, “The notes will be subordinate in right of payment to all existing and future debt issued, incurred or guaranteed by the Insurance Company, all existing and future claims of policyholders and beneficiaries and all other creditor claims which have priority over claims with respect to the notes under New York insurance law, other than any future surplus notes or similar obligations.”

The company also confirmed that capital infusion plan from private equity company Warburg Pincus is still on track.

The Warburg Pincus investment announced on December 10, 2007. As announced, Warburg Pincus has committed to invest $500 million in common equity at $31 per share and to backstop a $500 million rights offering to the Company’s existing shareholders.

Warburg Pincus will also receive warrants to purchase additional shares at $40 per share. The Warburg Pincus investment is proceeding according to plan, with the common equity investment currently expected to close in January 2008 and the rights offering expected to close in February 2008.

MBIA estimates that it will incur a total of $737 million in loss and loss adjustment expenses for the fourth quarter of 2007. These expenses consist of fourth quarter case loss activity of approximately $614 million and $123 million in unallocated loss reserve activity. The approximately $614 million case loss activity is principally related to MBIA’s insured securitizations of prime home equity lines of credit and prime closed-end second-lien mortgages.

MBIA’s $214 million total unallocated loss reserves at September 30, 2007 will increase with the addition of approximately $23 million, reflecting the regular quarterly addition of 12 percent of scheduled earned premiums, and the special addition of $100 million to reflect MBIA’s estimate of losses that are probable to occur as a result of the potential for adverse developments in the real estate market related to prime, second-lien mortgage exposure, but which have not yet been specifically identified.

The non-cash pre-tax change in fair value of insured credit derivatives (“mark-to-market”), under generally accepted accounting principles, between September 30, 2007 and December 31, 2007 is estimated to be a loss of $3.3 billion. The non-cash after-tax mark-to-market loss is estimated to be $2.1 billion. These preliminary mark-to-market estimates are subject to adjustment. Of this $3.3 billion mark-to-market loss, approximately $200 million represents estimated credit impairment related to three CDO-squared transactions that MBIA expects to incur actual claims in the future.


[R]9:00AM New York, 7:30PM Mumbai-Sensex fell, dragged by oil & gas, metal and healthcare stocks.[/R]

Stock markets in India closed flat on Wednesday with the Bombay Stock Exchange benchmark index falling 0.02% or 4 at 20,870.

Of the stocks traded on BSE, 757 shares advanced, 2,137 declined, and 25 remained unchanged.

Of the Sensex index, 12 stocks gained and the rest fell.

Turnover on the BSE stood at 9,610 crore rupees lifted by Reliance companies.

Reliance Natural Resources recorded the highest turnover of 701.70 crore rupees, Reliance Capital, Reliance Petroleum, Reliance Communications and Reliance Energy were other turnover leaders on the exchange.

Turnover on the National Stock Exchange was at 21,469 crore rupees.

In the broader markets, Nifty dropped by 0.3%. The 50-share index closed at 6,272.

IT and real estate stocks gained while oil & gas, metal and healthcare stocks saw selling.

Among the benchmark index stocks, NTPC, HDFC Bank, Reliance Communication, Hindalco Industries, Reliance Energy and DLF Ltd were among the advancers as the stocks recorded gains with gains of over 1.2% each.

Of the NSE-50 shares, Glaxosmithkline, Siemens India, Grasim Industries and TCS were leading gainers with a rise of over 0.9% each.

On the other hand, Reliance Petroleum, BPCL, Mahindra & Mahindra, BHEL and ICICI were leading losers in the broader index with a fall of 2.4% or more.

Indians living in Britain have contributed 5 percent in the country''s Gross Domestic Product, British High Commissioner to India Richard Stagg has said.

Stagg lauded the Indian community in UK for their role in the country''s economic growth and urged some India companies to invest in his country. British High Commissioner, however, failed to mention that it is still not easy to obtain travel visa for the most Indian citizens.

Even after nearly 60 years of independence from Britain, UK has less than four cities in India where people can obtain travel visas. UK maintains more than 10 offices in several cities in the U.S.

Of the BSE shares, Reliance Industries declined 0.6% to 3,031.95 rupees.

Bharat Heavy Electricals shed 2.02% to 2,443.80 rupees, Larsen & Toubro slid 0.07% to 4,329.8 rupees while Suzlon Energy 1.4% to 2,241.6 rupees.

Tata Motors slipped 0.5% to 770.45 rupees, Bajaj Auto shed 0.2% to 2,532.1 rupees, Maruti Suzuki India fell 1.5% to 925.7 rupees.

Mahindra & Mahindra shed 2.7% to 807.9 rupees after the company said Mahindra Holidays & Resorts India, a leisure hospitality provider offering family holidays, sold 2% in private placement to the State Bank of India for a consideration and raised 80 crore rupees.

Tata Steel lost 0.2% to 890.5 rupees and Hindalco Industries gained 1.7% to 212.5 rupees.

India''s largest private sector bank by assets ICICI Bank declined 1.7% to 1,310.45 rupees.

Wipro gained 0.6% to 490.85 rupees and Satyam Computer Services surged. Infosys Technologies declined 0.4% to 1,655.55 rupees.

NTPC advanced 4.5% to 277.15 rupees and HDFC jumped 3.6% to 3,174.25 rupees. Reliance Communications surged 2.05% to 820.8 rupees.

ONGC lost 1.8% to 1,298.65 rupees and Ranbaxy Laboratories shed 1.7% to 411.6 rupees.

[R]5:00AM New York, 7:00PM Hong Kong - Hong Kong budget surplus to reach HK$100 billion.[/R]

Hong Kong stock indexes gained buoyed by rising metal and oil prices, including speculations that the U.S. Federal Reserve will cut interest rates on fears of falling consumer spending.

In Hong Kong trading Hang Seng index bucked the downtrend in the morning session rising to a six week high at 1.9% or 502.95 at 27,615.85, while the China Enterprises index of Hong Kong-listed shares rose 3.1% or 479.75 at 16,139.46, the biggest one day percentage gain since November 29.

Daily turnover on main-board soared to HK$120.3 billion compared to HK$114.9 billion recorded yesterday.

The Sing Tao Daily reported today that Hong Kong Finance Secretary John Tsang Chun-wah may announce in the city’s budget next month measures including a one-time tax return with a higher cap, lowering the marginal tax bands and tax rate, and an increase in the personal tax concession ceiling.

Tsang will also offer taxpayers a one-time tax rebate of 70% to 80% of salaries tax, compared to increase of 50% in 2006. He is also expected to raise the total allowance available under the cap which was set at HK$15,000 last year.

The Standard online news also reported today that Hong Kong''s budget surplus will probably quadruple from thegovernment October estimates of HK$25.4 billion to HK$100 billion.

Commodity stocks gained after gold and copper prices increased. Gold prices reached $882.55 per ounce on a falling U.S. dollar.

Gold producer Lingbao climbed 5% to HK$5.93, while Jiangxi Copper soared nearly 9% to HK$20.55. Zinc producer Hunan Nonferrous Metals Corp jumped 7.4% to HK$5.55.

Crude oil for February rose 0.7% to $97 per barrel. Cnooc Limited spiked 5.7% to HK$13.90. PetroChina Co Limited rose 2.7%.

Property companies gained on lingering speculation the U.S. Federal Reserve will cut the key rate this month to sustain growth. Sun Hung Kai Properties edged up 2.4% to HK$172.80. Cheung Kong Holdings Limited increased 2.4% to HK$146.

Parkson Retail Group Limited jumped 4.3% to HK$86.35 on news its majority shareholder was selling close to 8 million shares at a discount at about HK$78.66 per share. The stock was quoted at HK$82.80 at yesterday’s close.

However exporters fell on fears of a slowdown in the U.S. Li & Fung dropped 2% at HK$27.4.

Lenovo plunged 10.4% to HK$5.88 after research firm CLSA downgraded the stock to sell on rising speculation of a slowdown in information technology spending in 2008 and increasing costs. HSBC tumbled 0.3% to HK$127.90.

China High Speed Transmission Equipment dropped 6.2% to HK$18.02 following a secondary share placement.


[R]5:00AM New York, 7:00PM Tokyo-World Bank says Japan economic growth to slow to 1.8% in 2008.[/R]

In Tokyo trading Nikkei 225 bucked a 0.2% decline by mid-day to close up 0.49% or 70.49 to 14,599.16, while the broader Topix Index soared 19.26 to 1,422.32.

In the first section of the Tokyo Stock Exchange 9.8 billion shares worth 1.2 trillion yen were traded and in the second section 261 million shares worth 4.3 billion yen changed hands.

Of the Nikkei 225 stocks 144 gained, 71 declined, and 10 were unchanged.

Shimizu Corporation led advancers with a rise of 6.85% followed by Sumitomo Metal Industries climbing 6.59%.

Commodity stocks gained as well as metal prices increased. Sumitomo Metal Industries rose 5.01% and Mitsui & Company soared 4.85%.

The World Bank reported yesterday in its Prospects for Global Economy report that it projects economic growth in Japan will slow to 1.8% in 2008 on the back of the global credit crunch and a strengthening yen.

The Bank expects GDP growth of 2.0% in 2007, followed by 2.2% in 2006.

According to the World Bank, developments in the U.S. are expected to influence conditions in Japan.

“Inflation is not yet permanently in positive territory, making it unlikely that Bank of Japan will follow its initial tightening steps with further increase in interest rates,” read the report.

Bank of Japan Governor Toshihiko Fukui said in a speech marking 150 years of Franco-Japanese diplomatic relations at the Banque de France in Paris yesterday that globalization is making it impossible for central bank’s to assess the economic situation without taking a look at global economic trends.

Fukui added that central bank cooperation is becoming more important as financial transactions are faster and deeper such that “if a shock occurs in one country, it will immediately spill over onto numerous other financial markets”.

Kyodo news online reported today that Japan Patent Office has cut filing and other fees for trade marks by an average 43% and for patents by 12%.

Applications and maintenance of patents for 10 years will be lowered for the first time since 1984 from 480,000 yen to 430,000 yen, while applications and renewal fees for trademarks will be cut for the first time in four years from 130,000 yen to 70,000 yen.

The necessary legislation will be submitted to the ordinary Diet session this month as reductions are scheduled in June.

Of the Nikkei 225 index shares Shimizu Corp led advancers with a rise of 6.85% followed by gains of 6.59% in Sumitomo Metal Industries, 6.40% in Obayashi Corporation, 5.12% in Sekusui House, and 5.01% in Sumitomo Metal Mining.

Commodity stocks rose on rising metal prices and as platinum prices for December delivery climbed 1.1% to 5,370 yen a gram on the Tokyo Commodities Exchange.

Exporters also gained after the yen fell from 109.31 to 109.34 against the dollar. Canon Corporation spiked 0.61%, Casio Computer edged up 1.71% and Sony Corporation jumped 2.65%.

Mitsumi Electric Company led decliners of the Nikkei 225 index shares with a fall of 4.62% followed by losses of 4.52% in NTT Data Corporation, 3.78% in Trend Micro Incorporated, 3.74% in Nippon Soda Company, and 3.29% in Advantest Corporation.

NTT Data Corporation fell after it said today its tender offer for German information service company Intelligence AG was successful.

Nikkei news online edition reported today that Matsushita Electric Industrial Company will construct a new facility for about 95 billion yen to boost capacity at its chipmaking plant in Toyama Prefecture.


[R]4:00AM New York, 8:00PM Sydney- ASX 200 index declined 0.7% despite gains in resource stocks.[/R]

ASX 200 index lost 0.7% or 40.4 to close at 6,087.70.

The Preliminary market turnover was 1.66 billion shares worth $5.94 billion, with 367 shares moving up, 885 moving down, and 356 unchanged.

The most actively traded stock was Retail Star, with 67.61 million stocks changing hands with a value of $2.001 million.

Commonwealth Bank of Australia today became the third bank to raise its mortgage rates after increasing its variable interest rate on mortgages to recoup higher funding costs. Third bank has raised interest rates in Australia in the last four days without a similar move from the central bank.

The bank raised its rates for variable home loans by 0.1% to 8.67% for new and existing loans and its variable business loans by 0.15 percentage points. The increase would be effective on Friday.

National Australia Bank Ltd. and Australia & New Zealand Banking Group Ltd were the first two banks to raise their rates for variable home loans this month.

Newcrest Mining Ltd''s share gained 6.6% to a record after precious metal prices surged to a high. Gold for immediate delivery rose by 1.5%, to a record $891.70 an ounce today. Investors are increasingly using precious metals and agricultural commodities to hedge the falling dollar.

Gold has added 6% this year after adding 31% in 2007. Oil is nearly unchanged but rose 57% in 2007.

Lihir Gold gained 6.8% and was the leading performer on the exchange today while Sino Gold Mining Ltd rose 6.2%.

The Australian dollar gained following a rise in retail sales in November above economists'' expectations.

The Australian dollar traded lower against the U.S. dollar at $0.8828 up from yesterday''s $0.8794.

Of the ASX 200 index shares, Lihir Gold Limited led the gainers with a rise of 6.8% followed by increases in Newcrest Mining of 6.6%, in Sino Gold Mining of 6.2%, in Coeur D''Alene of 5.6%, and in Pan Australia Resource Limited of 5%.

Of the ASX 200 index stocks, Allco Finance Group led the decliners with a fall of 7.7% followed by losses in Centro Retail of 7.2%, in Compass Resource of 6.9%, in Paperlinx Limited of 6.5% and in DB Trust of 5.9%.