Metals Lift Global Markets

123jump.com Staff
28 May, 2007
New York City

Global markets raced higher led by a sharp rise in China, Korea, Brazil, Japan and Chile. Rising prices of copper and nickel lifted commodities driven markets and stocks around the globe. However, Peru fell 2.4% on worries that higher metal prices are not sustainable. OMX is likely to receive bid from Dubai. Norsk Hydro is reported to mull a bid for Alcan, higher than offered by Alcoa. Rupee in India surges to a nine-year high.

[R]5:00PM New York, 11:00PM Frankfurt, 2:30AM Mumbai – Global Markets[/R]

Crude oil in New York trading fell 1.4% or 91 cents to close at $64.30 on the news that two-day old oil worker strike in Nigeria has ended. Gasoline June futures fell 1 cent to close at 239 cents per gallon.

Asian Markets rallied across the region led by a steep gain of 2.2% in Shanghai followed by a rise of 0.8% in South Korea, Indonesia, and Malaysia, and 0.6% advance in Japan. Rising metals prices lifted steel stocks in Korea, Australia and Japan. In Australia Alumina gained 2.6% and BHP Billiton and RTP advancing 1.5%. Posco in Korean trading jumped 4.5% on analysts upgrade. In Japan Sumitomo Metals and Mining gained 3.2% on higher copper and nickel prices. Chinese stocks continued their advance on a heavy trading volume. Jiangxi Copper gained 9%, Sinopec advanced 5.4% and China Life rose 3%. In India companies in cement, bank and brokerage firms rose. Rupee surged to a nine-year high.

European Markets closed higher on low volume as markets in U.K., Switzerland and Germany were closed. Metals, mining and infrastructure stocks advanced in Spain and France. Spain with a gain of 0.48% led the region followed by a rise of 0.34% in Italy and 0.25% in France. France Telecom rose nearly 1% on the news that it has received a buyout offer for its unit in the Netherlands. OMX, subject of merger with Nasdaq, rose 8.3% on the news that Dubai International Financial Center may offer a higher bid. Local newspaper in Italy reported that Intesa Sanpaolo may participate with unit of Australia based Macquarie Bank to buy airports in Rome.

Latin Markets across the region rose led by 1.2% rise in Chile, near 1% gain in Brazil and Argentina and 0.7% advance in Mexico. In Peru, Lima General Index fell 2.4%, a steep decline for the second time this month. The Peruvian index had gained more than 78% for the year and recently lost 10% reflecting gyrations in the metals market. Brazilian metals and mining companies rose in sympathy with higher metal prices in European trading and on expectations that Chinese demand will remain robust. Gerdau and Vale do Rio Doce led the advancers. Tenaris, Telecom Argentina and BBVA Banco Frances led the gainers in Argentina. Chilean market advanced on the news that the government will increase the limit to invest in international markets gradually over the next nine months to 45% from the current 30%.


[R]1:00PM NY, 5:00 PM Frankfurt European stocks closed up, helped by steel stocks.[/R]

European stock markets closed in the positive territory Monday after trading in a tight range, with the U.K., German and Swiss bourses closed for public holidays. Market sentiment was supported by strength among steel companies, which gained on speculation that growing demand for commodities and rising prices may lead to further consolidation in the metals industry.

Arcelor Mittal and Vedior stood out among gainers, rising 0.8% and 0.9% respectively. Spanish steelmaker Acerinox climbed 3.8% benefiting from nickel price movements. Elsewhere, infrastructure and energy company Acciona gained 2.5% on the back of news that private-equity firms Bridgepoint International and 3i Group consider launching separate bids for Acciona''s handling business.

In France, aerospace company EADS rose 1.2% on corporate news. France Telecom added 0.85% after the company said it will examine offers it received to buy all or part of its subsidiary Orange Netherlands. On the side of the losers, Utility Gaz de France led dropped 1%. The French CAC-40 added 0.2% to 6071.47, the Netherlands''s AEX Amsterdam rose 0.4% to 537.56 and Spain''s IBEX gained 0.5% to 15124.60.


[R]8:30AM Asian markets finish mostly higher Monday with China leading advancers.[/R]

Asian markets ended mostly higher Monday. The Chinese benchmark Shanghai Composite Index finished 2.2% higher at 4,272.11. Large-caps generally advanced Monday with Dongfang Boiler surging by its daily 10% limit, and Hudong Heavy Machinery also rising by its 10% limit.

The Nikkei 225 Stock Average in Tokyo gained 0.6% to close at 17,587.59, recovering some of 215.76-point decline on Friday. Among materials producers that rose strongly, Sumitomo Metal Mining was up 3.2% and Mitsubishi Materials advanced 1.7%. Fujitsu Access soared 13%. News in the afternoon of the Agriculture Minister of Japan, Toshikatsu Matsuoka, suicide pared part of the gains with worries of the political fallout.

The benchmark index Hang Seng Index in Hong Kong gained 9.10 points, or 0.04%, to 20,529.76. First Shanghai Investments rallied 12.9%, while Taifook Securities Group soared 10.6%. The Australian benchmark S&P/ASX 200 index closed flat at 6,251.4. BHP Billiton gained 1.5% after the U.S. market rose and London Metal Exchange copper gained 3% on Friday. Rio Tinto ended 1.5% higher on reports it was mulling a bid for Alcan.

Gains in the U.S. and other Asian markets lifted South Korea, with the main index closing above the key psychological level of 1,650 on steelmaker Posco and brokerage stocks. The Korea Composite Stock Price Index finished 0.8% higher at 1,657.91. Taiwan ended flat at 8,156.82, in light trading volume.


[R]7:30AM NY-6:30PM Mumbai Sensex finishes higher, pares gains in early trade.[/R]

The Sensex on BSE finished 59.44 points, or 0.41%, higher at 14,397.89.

The market-breadth was strong as there were almost three gainers for every two decliners. For 1,470 stocks that advanced, 1,094 declined and only 97 remained unchanged. Of the 30 stocks in the Sensex, 19 advanced, while the rest declined. The turnover on BSE was Rs 4,148 crore, lower than Rs 5,044 crore on Friday. The turnover on NSE was Rs 9320.08 crore, also lower than Rs 9835.09 crore on Friday.

Economic news

The Indian rupee, which is the best-performing Asian currency this year, may drop as the Reserve Bank of India intervenes to maintain international competitiveness. RBI is expected to intervene aggressively after staying on sidelines in March and April months.

The Prime Minister, Singh has reiterated the need for a wide range of power sector reforms including open access and competition. Prime Minister said that inter-state transmission has to be opened up to competition and a separate and independent government body has to be established to control the National Load Dispatch Centre.

Trading highlights

India Infoline was the most-active stock with a turnover of Rs 134 crore followed by Unitech and Advanta. India Infoline jumped as much as 45% before settling at 30% rise level on the news that it has attracted four senior executives from CLSA to build its merchant banking, asset management and institutional sales business. The company is reported to have offered rights to buy 9 million shares at a 24% discount to the current price of 440 rupees in the next eighteen months.

Advancers

Banking and financial stock were in focus today on fresh buying. HDFC Bank led advancers, surging over 5% to Rs 1,125. Other stocks which advanced from banking & financial sector were ICICI Bank, up 1% to Rs 922 and State Bank of India, rising 0.4% to Rs 1,304.

Housing Development Finance Corporation rose 1.5% on the news that the company has agreed to sell 18 million shares (1.8 crore shares) at a price of 1,730 rupees to a unit of private equity group Carlyle and division of Citibank based in Mauritius for $715 million or nearly 3,000 crore rupees.

Larsen & Toubro surged 2.7% to Rs 1,785 and Gujarat Ambuja and Maruti rallied almost 2% each to Rs 116 and Rs 825, respectively.

Ranbaxy Laboratories advanced 0.2% to Rs 382 after its wholly owned subsidiary, Ranbaxy obtained from Bristol-Myers Squibb Company the U.S. rights to a group of 13 dermatology products. These brands will be sold in the US market under the Ranbaxy Laboratories Inc. label.

Cipla, Bajaj Auto, gained around 1.5% each to Rs 208 and Rs 2,203, respectively. HDFC and ACC also gained around 1.5% each to Rs 1,845 and Rs 870, respectively.

Decliners

Hindustan Lever led the decliners, down 1.3% to Rs 201. Infosys lost 1.1% to Rs 1965 on 3.90 lakh shares. Other large-cap IT stocks also lost. Wipro was down 0.6% to Rs 539, TCS dipped 0.4% to Rs 1,224 and Satyam Computers was off 0.6% to Rs 469.

Reliance Energy and NTPC dropped 1% each to Rs 551 and Rs 162, respectively. Index heavy Reliance Industries shed 0.2% to Rs 1727 on 3.24 lakh shares. Reliance will begin natural gas production from its Krishna Godavari fields in Bay of Bengal from July 2008 as planned.


[R]6:30AM European markets are higher in light trading on Monday.[/R]

European markets were higher in mid-morning trade on Monday. The FTSE Eurofirst 300 was up 0.1% by mid morning to 1,598.52, while the CAC 40 in Paris added 0.1% to 6,060.44.

Advancers

Prospects of a bid war for OMX, the Nordic bourse operator, pushed the stock 6% higher. On Friday, OMX agreed a $3.7 billion takeover by US-based Nasdaq, whose bid for the London Stock Exchange was declined in February.

Millennium BCP, the largest bank in Portugal, rose 2.3% after Keefe, Bruyette & Woods raised its price target, saying that under the current environment of consolidation in the banking sector, BCP would make an attractive break-up takeover candidate.

Spanish tobacco company Altadis was up 1% after reports the UK Imperial Tobacco was set to make an improved offer of more than 50 euros a share.

Safran, the French aerospace and telecoms group, rose 2.7% after announcing late on Friday it was to split its Sagem Communication division into two separate subsidiaries, a mobile telecoms equipment division and a broadband division. The company added it was seeking partnerships for both units.

Decliners

There were no major decliners in mid-morning trade Monday.

Commodities

Crude oil fell in New York on speculation U.S. fuel prices may ease as refiners increase output to meet summer demand and after oil workers in Nigeria ended a two-day strike. Crude oil for July delivery fell as much as 57 cents, or 0.9 %, to $64.63 a barrel, in after-hours electronic trading on the New York Mercantile Exchange. Brent crude oil for July settlement was at $70.21 a barrel, down 48 cents, on the London-based ICE Futures exchange.

Gold for immediate delivery fell as much as 90 cents, or 0.1 %, to $655.10 an ounce. Silver for immediate delivery rose 1 cent to $12.96 an ounce.

Currencies

The dollar traded near a six-week high against the euro on speculation housing and job reports this week will relieve pressure on the Federal Reserve to cut interest rates this year. The dollar traded at $1.3454 per euro in early trade in London from $1.3442 late in New York May 25. The dollar was at 121.70 yen from 121.79 last week.