London Rises on Cadbury Schweppes

Ivaylo
18 May, 2007
New York City

The UK market hit a near seven-year high on Friday as oil stocks surged and Cadbury Schweppes advanced on a report that private equity groups are putting together an 8 billion pounds offer for its US beverages arm. As Brent oil prices remained steady at $70 a barrel, oil large-caps continued to make gains. The FTSE 100 was up 40.2 points to trade at 6,619.5.

[R]9:30AM The FTSE 100 gains Friday, aided by Cadbury Schweppes and oil large-caps.[/R]

The FTSE 100 was up 40.2 points to trade at 6,619.5, its highest level since September 2000.

Advancers

Cadbury Schweppes surged 3.5% on reports that two private consortiums were preparing 8 billion pounds bids for the US drinks unit of the company. Insurer Royal & Sun Alliance was another sharp advancer, up 2.1%.

A firm oil price boosted oil companies. BG Group and Royal Dutch Shell rose 2%, while BP was up 1.7%. Cairn Energy added 3.5% as Citigroup lifted its recommendation on the stock from hold to buy.

Decliners

There were few decliners. British Airways slid 3% after a disappointing set of full-year results. Operating profit fell 13% to 602 million pounds and the airline also added it was to make a provision of 350 million pounds in its full-year accounts over a fuel surcharge investigation.

Assura, a group which develops health care facilities, announced it is performing in line with expectations for the first half of the year and the property division is continuing to work towards its targets. Assure fell 2.1%.

[R]8:30AM Asian stocks decline across the board on a plunge in copper prices.[/R]

Asian markets ended mostly lower on Friday. Japanese Nikkei 225 finished down 0.6% at 17,399.58. Metal-processing and smelting firm Dowa Holdings slumped 4.7%, while Toho Zinc fell 2.6%. Nippon Steel, the world second-largest steel producer, fell 2.4%, while Credit Saison dipped 4.9%. Sumitomo Metal Mining, the largest nickel miner in Japan, lost 4.1 %, its biggest drop since April 2.

Strong expectations of another interest-rate hike in China sent Hong Kong shares lower. Hong Kong Hang Seng ended down 0.4% at 20,904.84. China Mobile outperformed, though, on hopes they will soon be able to list on mainland stock markets. China Mobile, the world largest wireless mobile operator by subscribers, closed 0.5% higher. China Life fell 1.5%, while Bank of China dropped 1.2%. Hong Kong Exchanges & Clearing shed 1.2%.

The Shanghai Composite closed 0.5% lower at 4,030.25. China Merchants Bank Co., the the third biggest publicly traded lender in China, lost 2.2%. China Minsheng Banking Corp., the first privately controlled lender, fell 2.3%.

In Australia, the S&P/ASX 200 closed 0.8% lower at 6,312.50, as miner BHP Billiton shed 2.4%. South Korean Kospi index also finished down 0.2% at 1,612.25, The Singapore Straits Times index closed down 0.4% at 3,513.28 and Taiwan Weighted Index settled down 0.1% at 8,034.14.

[R]8:00AM NY-7:00PM Mumbai Sensex finishes flat, banks, IT stocks rally.[/R]

The Sensex on BSE ended Thursday 3.70 points, or 0.03%, higher at 14,303.41.

The market-breadth was negative as 1,106 stocks advanced, 1,491 declined and only 72 stocks remained unchanged. Of the 30 stocks in the Sensex, 13 advanced, while the rest declined. The turnover on BSE was Rs crore, compared to Rs 5,951.91 crore on Thursday. On NSE, the turnover was Rs 9,810.09 crore, much lower than Rs 12,372.07 crore on Thursday.

Economic news

The wholesale price index advanced 5.44% in the 12 months to May 5 2007, lower than the the previous week’s rise of 5.66%, but higher than 4.37% in the same period last year.

BSE announced on Friday May 18 2007, it had completed the sale of 51% of equity shares to 19 domestic and overseas investors, including 10% sold to two foreign exchanges. Member-brokers of the BSE sold their shares in the exchange at Rs 5,200 per share.

Advancers

Private banks were in focus today, especially in late trading. HDFC Bank rallied 3.5% to Rs 1,072. The bank announced yesterday, its board had approved lifting additional share capital of $1 billion to meet the growing demand for loans.

ICICI Bank rallied 1.6% to Rs 951. The bank had surged in the last few days tracking the move by the Reserve Bank of India to allow banks to trade credit default swaps, which are used to hedge credit risk.

ITC and Hero Honda gained over 1% each to Rs 167 and Rs 687, respectively. Index heavy Reliance Industries was up nearly 1% at Rs 1,699. The stock struck a record high of Rs 1,705 at the end of the trading session, advancing for the third day in a row today.

Decliners

Bajaj Auto plummeted 8.5% to Rs 2,287 following a near 7% decline in yesterday's trade. At the beginning of the trading session, the stock had come off lower level after an initial drop of 13% to Rs 2,179.

Cement stocks declined. Gujarat Ambuja shed 3.5% to Rs 119. NTPC and Dr. Reddy lost nearly 2% each to Rs 156 and Rs 666, respectively. ACC and Hindalco shed 1.5% each to Rs 875 and Rs 147, respectively.

Tata Motors fell 1% to Rs 743. Tata Motors reported today a 26% growth in net profit to Rs 577 crore in the fourth quarter of fiscal 2007, from Rs 458 crore in in the fourth quarter of fiscal 2006.

[R]6:30AM European markets advance Friday on merger talk.[/R]

European markets were higher on Friday. By late morning, Frankfurt Xetra Dax added 0.8% to 7,560.14, the CAC 40 in Paris added 0.8% to 6,074.75 and London FTSE 100 climbed 0.8% to 6,630.5. National benchmarks rose in all 17 western Europe markets that were open.

Advancers

Persistent rumors of buyout talks involving Royal Dutch Shell lifted the stock 3.7% on Thursday, was largely discredited, but speculation continued that the sector could be ready for consolidation. Shell rose 1.4% in Amsterdam.

Other oil companies also advanced. Statoil ASA, Norway oil giant, gained 2.6%. Spanish Repsol, which has been the object of investment by Sacyr-Vallehermoso, the Spanish construction group, rose 1.4 %. Total of France gained 1.8%.

EADS, the European aerospace company and maker of Airbus jetliners, climbed 3.2% after Dubai International Capital, the private equity group, said it was in talks to buy a stake in the business for a fund it manages.

Bayer AG, which makes coatings and high-performance plastic at its material science unit, rallied 3.9% and steelmaker Arcelor-Mittal added 3.7% after announcing an interim dividend of 0.325 euro a share, prompting a target price upgrade by UBS.

Decliners

There were few decliners. British Airways declined 3.6% after the third-largest airline in Europe reported fourth-quarter net loss of 128 million pounds, or $253 million, after a labor dispute disrupted flights and trans-Atlantic traffic declined.

Commodities

Gold gained in London for the first time in three days on higher demand from jewelers. Gold for immediate delivery climbed $3.50, or 0.5%, to $661.15 an ounce, while silver gained 7.5 cents, or 0.6%, to $12.915 an ounce.

Crude oil retreated after reaching a three-week high in New York on speculation breakdowns and production halts mean refiners will have trouble replenishing U.S. gasoline stockpiles. Crude oil for June delivery fell 4 cents to $64.82 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Brent crude oil for July settlement was down 46 cents at $69.81 a barrel in electronic trading on the ICE Futures exchange.

Currencies

The dollar was mostly higher against other major currencies in European trading Friday morning. The euro traded at $1.3485, down from $1.3492 late Thursday in New York. The British pound traded at $1.9725, down from $1.9743. The dollar stood 121.35 Japanese yen, up from 121.27.

[R]5:00AM Copper declines Thursday, gold and silver follow suit.[/R]

The most-active July copper contract plunged 11.60 cents to end at $3.3065 per pound on the New York Mercantile Exchange. June gold lost $4.30 to settle at $657.20 a troy ounce, while July silver finished down 4.7 cents at $12.883 an ounce. July platinum closed also down $7.90 at $1,317.90 an ounce. June palladium bucked thr downtrend and settled up $2.90 at $360.40 an ounce.

The front-month June crude oil contract advanced $2.41 at $64.86 a barrel, while June gasoline ended up 9.96 cents at $2.4366 a gallon. June heating oil finished up 6.97 cents at $1.9367 a gallon and June natural gas added 18.5 cents to close at $8.075 per million British thermal units.

On the New York Board of Trade, Arabica coffee futures May settled up 3.10 cents at $1.1035 a pound, with July up 3.4 cents at $1.1310. Most-active July cocoa shed $6 to settle at $1,894 a metric ton. Futures on raw sugar in foreign ports for July ended unchanged at 8.68 cents a pound, with October off 0.02 cent at 9.01 cents.

On the Chicago Board of Trade, July corn futures closed 3 cents lower at $3.73 per bushel, and December finished 7 cents lower at $3.7050. July soybeans settled unchanged at $7.9275 per bushel. July wheat settled down 11.25 cents at $4.8550 per bushel.