FTSE Slips in Mid-Afternoon Deals

Ivaylo
09 May, 2007
New York City

Excitement in opening deals this morning over rumours that BHP Billiton is approaching rival Rio Tinto has faded away amid a mixture of ex-dividends, a possible US interest rate hike today and some cautious trading statements weighing on the benchmark. General retail is in focus as electronics retailer DSG and Home Retail are both higher on another set of strong sales figures for April. In the wider market in mid-afternoon trading, the FTSE 100 is 0.18% lower at 6,538.

[R]9:30AM UK benchmark index is lower Wednesday as speculation around Rio Tinto fizzles out.[/R]

The UK benchmark is lower in mid-afternoon trading on Wednesday. The FTSE 100 is 0.18% lower at 6,538.

Advancers

Rio Tinto is still higher, up 6.4%, even though it announced it will refrain from comment on market gossip. Its shares jumped by 11% at one point on the Australian market overnight as the story of a bid from BHP took hold.

Other miners also advanced in sympathy. Kazakhmys gained 3.1%, Vedanta rose 1.8% and BHP itself was 2.2% higher.

Hanson gained 0.7% as it confirmed that HeidelbergCement was considering a bid for the aggregates provider.

Scottish & Newcastle, also seen as a bid target, gained 1.7% after robust figures from its eastern European joint venture BBH. Broker upgrades sent DSG International 3.3% higher.

Decliners

Sage Group, the last remaining technology stock on the FTSE 100, shed 3% after it said it had plans to restructure in the US and said it was looking to make further acquisitions.

Ex-dividends also weighed on the index. Antofagasta retreated 4.8% and Rexam lost 2.5%. Pub operator JD Wetherspoon lost 3.6% after it warned that higher costs in preparing outlets for the upcoming UK smoking ban would take its annual profits marginally below expectations.

EasyJet, the airline, dropped 3.1% despite cutting its interim losses as it announced it had reduced ticket prices further in a competitive market.

[R]8:30AM Asian stocks end mostly higher on Wednesday with Shanghai setting a new record high.[/R]

Asian markets closed mostly higher on Wednesday.

In China, the Shanghai Composite Index ended up 1.6% at 4013.09, a new record high. The Shenzhen Composite Index rose 0.3% to 1111.29, also a record close. The Shanghai index more than doubled last year and has increased another 50% so far this year. Drawn by the robust performance of the stock market and the potential for high investment returns, retail investors have been flooding the market in the past months. Industrial & Commercial Bank of China rose 5.5% and Bank of China gained 7.8%. Baoshan Iron & Steel added 4.7% and China Yangtze Power advanced 2.9%.

The 225-issue Nikkei Average in Tokyo closed 0.5% higher at 17,748.12. Olympus surged 3.3% after the company raised its net profit forecast for the current fiscal year. Bucking the trend, Softbank shed 3% after UBS Securities recommended investors to sell the share on concerns its valuation is above the brokerage price target.

Hong Kong Hang Seng Index added 0.7% to end at 20,844.78 and Australian S&P/ASX 200 climbed 0.6% to close at 6,341.00, buoyed by talk of a possible takeover in the global-resources sector. Bid target Rio Tinto soared 6.7% in Sydney on speculation the miner may have been approached by BHP Billiton. Shares of BHP Billiton gained 1.1%.

South Korean Kospi Index gained 0.7% at 1,593.42. bucking the uptrend, Taiwan Weighted Price Index lost 0.5% to finish at 8,052.70.

[R]8:00AM NY-7:00PM Mumbai Sensex ends higher on a rally in banking stocks.[/R]

The Sensex on BSE finished 16.05 points, or 0.12%, higher at 13,781.51.

The market-breadth was negative as 1,122 stocks advanced, while 1,407 stocks declined and only 104 stocks remained unchanged. Of the 30 stocks in the Sensex, 17 advanced, while the rest declined. The market was highly volatile as it traded within the range of 194 points. The turnover on BSE was Rs 3,937 crore, lower than Rs 4,280.65 crore on Tuesday. On NSE, the turnover was Rs 8,394.44 crore, lower than Rs 9,549.68 crore on Tuesday.

Economic news

The Indian government fixed a floor price of 850 rupees a share for selling its remaining 10.27% stake in car maker Maruti Uduog. Suzuki Motor Corp owns 54.2% of Maruti.

Global mobile company Vodafone announced Wednesday it has formally acquired the controlling stake in Hutch-Essar from Hong Kong-based Hutchison Telecommunications International for $10.9 billion.

India’s oilmeal exports increased in April more than 8% to 432,950 tons from a year ago on improved sales of rapeseed meal. India exported 399,225 tons of oilmeal in April 2006.

Trading highlight

ICRA was the most-active stock with a turnover of Rs 250.14 crore followed by Indiabulls and new-issue Fortis.

Advancers

Fresh buying interest in bank stocks helped the rally. SBI soared 3.8% to Rs 1,123. and private banking large-cap ICICI Bank was up 0.9% at Rs 849, while HDFC Bank was up 0.71% to Rs 997. Other gainers included Hero Honda, which rallied 3.2% to Rs 701, and Reliance Energy surging 2.7% to Rs 519. Tata Steel gained 1.6% to close at Rs 562 and Bajaj Auto added 1.2% to Rs 2,564.

Ranbaxy Laboratories settled 1.1% higher to Rs 393. The pharmaceutical company is intending to invest around Rs 60 crore to upgrade the recently acquired Be-Tabs Pharma units in South Africa. Index heavy Reliance Industries rose 0.27% to Rs 1,598 on 6.38 lakh shares. It recovered from a low of Rs 1,577.

Decliners

IT large-cap TCS led the decliners, shedding 2.5% to Rs 1,237. Hindustan Lever and Cipla dropped 1.8% each to Rs 191 and Rs 208, respectively. ONGC slipped 1.4% to Rs 909. ACC and Infosys declined over 1% each to Rs 876 and Rs 1,981, respectively.

New issue Fortis Healthcare finished at Rs 100, lower than the IPO price of Rs 108 per share. The stock opened at Rs 105 and rallied to a high of Rs 109.10. Its low for the day was Rs 97.90.

[R]6:30AM European markets gain Wednesday as miners lead on merger talk.[/R]
European markets are higher on Wednesday. By late morning in London, Frankfurt Xetra Dax added 0.4% to 7,468.53, the CAC 40 climbed 0.3% to 6,054.42 and London FTSE 100 gained 0.3% to 6,571.4. National benchmarks gained in 12 of 18 western European markets except Iceland.

Advancers

London-listed miners led gainers amid rumours BHP Billiton was ready to make a takeover offer for Rio Tinto. Rio shares added 5.8% and BHP gained 3%, while expectations of consolidation within the sector drove Kazakhmys 3.1% higher and Xstrata climbed 2.4%.

Financial sector gains were led by BNP Paribas of France, which added 3.8% to a record high after posting forecast-topping first-quarter profit, lifted by investment banking and asset management gains. Credit Agricole rose 3.1% as takeover speculation continued to drift among the banking stocks.

Decliners

Aegon slipped 3.7%. The second- biggest Dutch insurer announced first-quarter profit fell 23% to 485 million euros, missing analyst estimates of 619 million euros, as one-time gains were not repeated.

Technology shares declined after the quarterly sales forecast of Cisco Systems, the world biggest maker of computer-networking equipment, missed estimates for the first time in a year.

Alcatel-Lucent, supplier of telecommunications equipment, slid 0.9%. Infineon Technologies AG, Europe second-largest maker of semiconductors, slipped 0.4%.

Commodities

Crude oil traded little changed in New York, near $62 a barrel, after Chevron said four contractors were kidnapped in Nigeria, raising concern supplies from the largest producer in Africa would be disrupted. Crude oil for June delivery was trading at $62.16 a barrel, down 10 cents, in after-hours trading on the New York Mercantile Exchange. Gasoline for June delivery was up 0.12 cents at $2.2057 a gallon in after-hours trading in New York.

Gold for immediate delivery was little changed at $685.62 an ounce in early trade in London . Silver dropped 1 cent to $13.495 an ounce.

Currencies

The dollar was mixed against other major currencies in European trading Wednesday morning. The euro traded at $1.3542, down from $1.3545 late Tuesday in New York. The British pound traded at $1.9918, up from $1.9889. The dollar bought 119.93 Japanese yen, down from 119.95.

[R]5:30AM Gold and silver decline Tuesday on dollar strength.[/R]
June gold declined $3 to end at $687.40 a troy ounce on the New York Mercantile Exchange, while July silver lost 4 cents to finish at $13.60. July platinum settled down $7.70 at $1,343.20 an ounce after trading at $1.335.80 and June palladium settled down $3.25 at $375.95 an ounce. The most-active July copper contract gained 0.70 cent to settle at $3.7225 per pound.

June crude oil futures advanced 79 cents to stop at $62.26 a barrel. June heating oil also gained 2.70 cents to close at $1.8299 a gallon. June gasoline futures settled up 1.49 cent at $2.2046 a gallon, after trading at $2.2075. June natural gas bucked the uptrend and dipped 14.2 cents to end at $7.637 per million British thermal units.

On the New York Board of Trade, July Arabica coffee futures ended up 0.45 cent at $1.0525 a pound, with September 0.45 cent higher at $1.0810. July cocoa settled up $17 at $1,890 a metric ton. Futures on raw sugar in foreign ports for July lost 0.10 cent to close at 9.22 cents a pound, with October off 0.09 cent at 9.52 cents.