UK Higher as Miners Surge

Ivaylo
20 Jun, 2007
New York City

The UK market advanced by mid-day on upbeat mining sector as Goldman Sachs raised their price target on six biggest miners.Retailers were in demand, like J Sainsbury, after Tesco issued a negative results statement yesterday. Cadbury Schweppes led the decliners in the FTSE 100 after the company announced yesterday a dramatic reorganisation plan. By mid-day, the FTSE 100 rose 0.6% to 6,689.

[R]9:30AM The FTSE 100 advances in mid-day trading on strong mining stocks.[/R]

By mid-day, the FTSE 100 rose 0.6% to 6,689, a gain of 38.8 points.

Advancers

Goldman Sachs upped their share price targets on the six biggest miners, citing metals prices would continue to increae through 2008. The brokerage thinks platinum prices will strike top levels through 2009. South Africa-focused platinum miner Lonmin rose 2.9% and Vedanta Resources gained 3.8%. Anglo American rose 1.9%, while Xstrata, whose stock Goldman also upgraded to buy from hold, added 1.5%.

J Sainsbury advanced 0.9% after the supermarket group came out with results that showed lower-than-expected sales growth of 5.1% for its first quarter. Also, talk that French bank Société Générale was mulling a bid for Lloyds TSB saw shares in the British bank rise 1.6%.

Decliners

Cadbury Schweppes led decliners, losing 2.6% a day after the confectionary group intends to implement a drastic reorganisation plan involving 7,500 job cuts, factory closures, and the sale of its beverage businesses.

Electronics retailer DSG International declined 1.1% after it reported a 5% decline in full-year profits to 295.1 million pounds. The stock also dropped on DSG decision not to enter the Russian market after a review of how other retailers had performed there.

Asia-focused bank Standard Chartered declined 1 % despite it announcing it was performing very strongly in the year to date and was about to meet full-year profit growth of 17 %.

[R]8:30AM Asian markets finished mixed Wednesday with Japan up, China down.[/R]

Asian markets finished mixed Wednesday. The Nikkei 225 Stock Average rose 0.3 percent to 18,211.68 in Japan. Mitsubishi Heavy Industries settled up 3.8% on a report it signed a partnership agreement under which Boeing will support the first passenger jet in Japan. Nissan Motor was up 0.8%, and Sharp finished 0.4% higher.

In Hong Kong, strong gains in Chinese oil producers buoyed the benchmark index to another closing record for the third consecutive session. The benchmark Hang Seng index advanced 0.47% to 21684.67. Offshore oil producer Cnooc surged 2.7% after a ratings upgrade by Credit Suisse, and PetroChina soared 5.2% after unveiling plans to list shares in Shanghai.

In China, the market closed lower on worries that new share offerings will lead to a supply glut, after oil company PetroChina announced it plans a Shanghai listing. The Shanghai Composite Index lost 2.42% to 439.18. Steel makers declined after China announced late Tuesday it will reduce or abolish tax rebates on export of metal and steel products from July 1. Baoshan Iron & Steel shed 2.2%, Wuhan Iron & Steel lost 2.7% and Laiwu Steel tumbled 5.2%.

In South Korea, the Kospi index fell 1.33% to 1783.79 on weakness in brokerage stocks. Hyundai Securities fell 13.5% and Daewoo Securities declined 9.8% as merger and acquisition premiums built into the stock prices subsided.

In Australia, the market closed at a record high as speculation continued that the Future Fund of the government was buying large amounts of share price index futures. Most of the strength was seen in financials, with National Australia Bank up 0.5%, QBE Insurance up 1.1% and Macquarie Bank up 1.8%. Among resource stocks, BHP Billiton dipped 1.1% and Rio Tinto shed 0.7% after London Metal Exchange prices declined overnight.

[R]7:30AM NY-6:30PM Mumbai Sensex spurts 116 points in a broad rally, led by banks and auto stocks.[/R]

The Sensex on BSE finished 116.45 points, or 0.81%, higher at 14,411.95.

The market-breadth was very strong as 1,446 stocks advanced, while 1,103 declined and 87 were unchanged. Of the 30 stocks in the Sensex, 23 advanced, while only seven declined. The turnover on BSE was Rs 5,049 crore, much higher than Rs 4,607 crore on Tuesday. On NSE, the turnover was Rs 9,977 crore, compared to Rs 8,350 crore on Tuesday.

Economic news

The rupee retreated Wednesday as an oil refiner bought dollars, but expectations of foreign investment flows into a $2.1 billion domestic share sale by ICICI Bank diminished losses. In morning trading, the rupee was at 40.83 per dollar, down from 40.79 on Tuesday.

India will approach the World Bank to take out a loan to develop an e-governance project to process all government purchases.

The petroleum ministry intends to offer additional 80 oil and gas blocks in the seventh round of auction under the New Exploration Licensing Policy, in mid-August. In February, under NELP-VI, the ministry gave 52 blocks of which 21 deep-water blocks to Oil and Natural Gas Corporation.

Kingfisher Airlines is to buy 50 planes from Airbus, in that number the new A350 XWB in a deal estimated at $7.3 billion at list prices. The Indian company intends to buy 15 A350-800 XWBs, 10 A330-200s, five long-range A340-500s and 20 A320 series aircraft, the companies announced today at the Paris Air Show.

Trading highlights

Divi''s Lab was the most-active stock with a turnover of Rs 165 crore followed by Reliance Capital and Educomp Solutions.

Advancers

Cement major Gujarat Ambuja Cements advanced 4.6% to Rs 118, led the gainers. Other cement stocks gained as cement shortage is expected to last for the next two years. ACC was up 0.8% to Rs 850 and Grasim advanced 3.1% to Rs 2,513.

State Bank of India rallied nearly 4% to Rs 1,425 on the news that the bank plans to sell $225 million abroad in perpetual bonds. HDFC gained 2% to Rs 1,812. ICICI Bank added 0.4%, to Rs 948 after the reports that the Singapore government intends to buy about 40% of ICICI record share sale.

Autos were in focus. Tata Motors rallied 3.5% to Rs 686. Tata Motors intends to raise $450 million overseas by selling shares to meet the capital and product development expenditure in view of its growth projects. Maruti advanced nearly 3% to Rs 773, and Bajaj Auto added 2% to Rs 2,162.

BHEL and Larsen & Toubro ended up around 1.7% each to Rs 1,430 and Rs 2,028, respectively. Index heavy Reliance Industries gained 0.3% to Rs 1,732. IT stocks ended mixed with Wipro 0.5% to Rs 524 higher and Satyam Computers, up 0.7% to Rs 472.

Decliners

Ranbaxy plunged 2% to Rs 352, and led the few decliners. TCS dropped 1.3% to Rs 1,146. Hindustan Lever lost 0.3% to Rs 189 and Infosys dipped 0.1% to Rs 1,954.

[R]6:30AM European market gain Wednesday on strength in banking stocks, insurers.[/R]

European markets advanced on Wednesday morning. The German DAX index rose 0.9% to 8,100,66 after striking a seven-year high of 8,104.39 early in the session, while the French CAC-40 index advanced 0.5% to 6,099.46. The U.K. FTSE 100 index climbed 0.5% to 6,682.50. National benchmarks advanced in all of the 17 western European markets that were open.

Advancers

Car maker Renault gained %, while Allianz of Germany advanced 2.6%. HSBC gained 1.1 %. Lower bond yields increase the value of debt owned by insurers and banks. Clariant, the world''s second-largest maker of specialty chemicals, climbed 2.2%
Misys, a U.K. provider of software for banks and hospitals, rose 3% after the company reported fiscal 2007 earnings and margins topping estimates..

Decliners

Swedish clothing chain H&M slipped 4% after it reported that second-quarter sales and profits just missed expectations. Still, the shares have been trading strongly in the past few years and touched a 10- year high in April.

DSG International, the operator of electronics retailers under the PC World and Currys names, announced annual adjusted profit before tax dropped 5% to 295.1 million pounds, in line with estimates the company gave in May, while sales rose 14% to 7.93 billion pounds.

Commodities

Oil prices declined Wednesday on caution that a U.S. fuel supplies report due later in the session will show increases in oil product inventories but a fall in crude oil stocks. Crude oil for July delivery, which expires later Wednesday, lost 15 cents to $68.95 a barrel in electronic trading on the New York Mercantile Exchange.

Gold fell for the first time in a week as a decline in the price of oil diminished the appeal of the precious metal. Gold declined $1.80, or 0.3%, to $659.65 an ounce, the first drop since June 12. Silver fell 3 cents, or 0.2%, to $13.31 an ounce.

Currencies

The euro traded higher against the U.S. dollar on Wednesday despite a new report that showed producer prices in Germany advanced last month. In morning European trading, the euro bought $1.3423, up from $1.3406 in New York late Tuesday. The Japanese yen fell to 123.23 yen from its level Tuesday of 123.35 yen. The British pound edged lower to $1.9878 from $1.9879 on Monday.

[R]5:30AM Gold and silver advance Tuesday while grain tumbled.[/R]

Gold for August delivery rose $4.40 to finish at $664.30 an ounce on the New York Mercantile Exchange. August silver rose 11.5 cents to end at $13.325 an ounce, and July platinum slipped $1.00 to end at $1,298.00 an ounce. On the Nymex, July copper futures fell 1.7 cent to finish at $3.4010 a pound.

Crude oil prices gained slightly to a new nine-month high on strike threats in Nigeria and Brazil. The energy markets were also awaiting weekly oil inventory data on Wednesday, which the market expects to show little improvement in U.S. gasoline supplies. Crude oil futures for July delivery rose a penny to settle at $69.10 a barrel. July gasoline futures fell 2.97 cents to settle at $2.2346 a gallon. July natural gas futures fell 17.1 cents to settle at $7.519 per 1,000 cubic feet.

Grain prices plunged on the Chicago Board of Trade on improving weather conditions which convinced traders to take profits after last week strong buying. July wheat futures fell 20 cents to finish at $5.81 a bushel on the CBOT. July corn dipped 20 cents to end at $3.96 a bushel, and July soybeans shed 26.25 cents to end at $8.29 a bushel.