Property Stocks Boost FTSE

Ivaylo
28 Jun, 2007
New York City

Property stocks led the FTSE 100 in London higher with British Land, Liberty International and Land Securities the main gainers. The rebound is also significant as the property sector has been the worst performing one since the turn of 2007. Strong closes in the U.S. market overnight and Asian markets today also supported the index. Advances in the oil sector and in Vodafone also brightened sentiment. The FTSE 100 was 0.5% higher.

[R]9:30AM The FTSE 100 advances on strong gains by British Land and Liberty International.[/R]

The FTSE 100 in London was 39.8 points, or 0.5%, higher at 6,561.5.

Advancers

British Land led the gainers, up 2.4% and another large-cap Liberty International was 2.3% higher. Land Securities also rose 2.1%. Other advancers included Whitbread, the leisure group, which gained 2.6%, while Vodafone surged 2.2% on continued talk of stakebuilding.

Further deal talk also lifted J Sainsbury, up 1% as reports circulate that property owner Robert Tchenguiz had doubled his position in the company to more than 10%

In mid-cap stocks, Domestic & General, a company that sells extended warranties on household appliances, rallied 8.3% after admitting it had received further bid interest.

Newspaper group Trinity Mirror gained 1.4% after it announced that stability rose within its advertising markets.

Decliners

News that adverse currency movements would reduce operating profit at Guinness brewer Diageo by up to 90 million pounds pulled the shares 1.8% lower.

Lender Northern Rock, is still losing ground having warned on profit in the previous session. Northern Rock fell 12% on Wednesday, and now, the mortgage bank, is a further 0.6% lower.

[R]8:30AM Asian stocks finish mostly higher with HK and Japan leading regional gainers.[/R]

Asian markets ended higher Thursday. In Tokyo, the Nikkei 225 Average settled 0.5% higher at 17,932. Sentiment was upbeat in Japan that US market will bounce back and that domestic market environment will also improve. Many large-caps advanced, with Toshiba up 0.8%, Toyota 0.9% higher and Nissan rising 1.4%.

After three days of declines, HK rebounded. The Hang Seng Index surged 1.1% to end at 21,938. China Mobile was the main gainer with a 1.7% increase on the prospect of a yuan-denominated initial public offering in Shanghai soon. Cnooc gained 4.1% on higher oil prices. China Construction Bank advanced 2.1%, and China Life gained 1.2%.

South Korean Kospi Index advanced 1.1% to 1,751. Construction stocks and nonlife insurers ended the four-day losing streak on the market. Hyundai gained 3.9% and Daewoo Engineering & Construction settled up 3.1%. Dongbu Insurance surged 4.1%. Australian S&P/ASX 200 also rose 1.3% to 6,265. BHP Billiton, up 2%, led the market higher. Rio Tinto advanced 2.7% and Woodside Petroleum rallied 3% after crude oil and metal prices rose.

The benchmark Shanghai Composite Index in China bucked the trend and plunged 4% to settle at 3914. The market declined sharply on reports that the government is reviewing a measure to reduce or cancel the tax on interest income so that investors would not enter the market, but would keep their money in bank accounts instead.

[R]7:30AM NY-6:30PM Mumbai Sensex ends higher on rally in cement stocks.[/R]

The Sensex on BSE finished 73.51 points higher, or 0.51%, at 14,504.57.

The market-breadth was strong as 1,442 stocks advanced, while 1,141 declined and only 72 were unchanged. Of the 30 stocks in the Sensex, 19 advanced, while the others declined. The turnover on BSE was Rs 4,682 crore, compared with Rs 4,844 crore on Wednesday. On NSE, the turnover surged to Rs 12,193 crore, much higher than Rs 9,375 crore on Wednesday.

Economic news

Finance Minister P Chidambaram said in an interview on a television channel that the government has no intention of controlling the price of cement, nor was there any control recently.

U.S. wheat growers announced that they might not take part in a tender by India which tries to buy 1 million tons of wheat as the U.S. and India has not resolved problems over import quality standards.

The rupee advanced after a four-day decline on banks buying in the Indian currency to meet cash requirements as the overnight borrowing rate surged to a six-week high. The rupee gained 0.2% to 40.905 against the dollar this morning in Mumbai.

Trading highlights

IFCI was the most active stock with a turnover of Rs 137.50 crore followed by new issue Meghmani Organics and Reliance Industries.

Advancers

Cement stocks rallied on the Indian finance minister P Chidambaram’s statement. ACC soared 8.3% to Rs 899. Gujarat Ambuja Cements surged 7.4% to Rs 125, and Grasim rallied 4.8% to Rs 2,624.

HDFC rallied 5% to Rs 1,958 after it got Rs 445 crore for its stake sale in BPO firm Intelenet to Blackstone, which in a total capital gain comes to Rs 381 crore on its BPO venture. Ranbaxy Laboratories, the pharmaceutical giant, gained 1.5% to Rs 348. Ranbaxy Pharmaceuticals Inc, its wholly-owned subsidiary, has started selling Pravastatin Sodium 80 miligram tablets in the US.

State-run banking large-cap State Bank of India gained 1.6% to Rs 1,470. Reportedly, SBI intends to launch a private equity fund worth $1 billion. ITC and Wipro advanced 1% each at Rs 155 and Rs 515, respectively.

Decliners

Auto makers lost on profit taking. Bajaj Auto led the decliners in the Sensex, down 1.8% to Rs 2094 as the stock went ex-dividend today, Tata Motors dipped 1% to Rs 665 and Maruti Udyog declined 0.3% to Rs 750.

Oil exploration large-cap Oil & Natural Gas Corporation declined 1.6% to Rs 906 and Cipla lost over 1% each to Rs 203. Index heavy Reliance Industries shed 0.3% to Rs 1,692.

[R]6:30AM European markets advance on energy and mining stocks.[/R]

European markets are higher on Thursday. The German DAX 30 index advanced 1% to trade at 7,880.13, the French CAC-40 index advanced 0.9% at 5,996.38, and the U.K. FTSE 100 index rose 0.7% at 6,571.80. National benchmarks increased in all of the 17 western European markets that were open.

Advancers

In Germany, the advances of more than 2% put sportswear group Adidas and truck maker Man in the lead. In France, turbine maker Alstom and yogurt producer Danone rose 1.8% each and boosted the market. Nestle climbed 2.5% as Deutsche Bank raised its recommendation on the shares to buy from hold.

BP gained 1.9% and Statoil ASA, largest producer of oil and natural gas in Norway, rose 1.7%. Royal Dutch Shell also advanced 2.1%.

Miners were also strong as the price of copper gained. BHP Billiton climbed 1.6% and Rio Tinto Group, the world third-biggest mining company, added 1%.

Shares in Vodafone Group rose 2% after a report from Dutch technology magazine Bright that the firm is likely to supply Apple Inc iPhone in Europe, starting in December.

Decliners

Diageo slid 1.3% even as the world biggest liquor company announced revenue growth accelerated in the fiscal second half.

Commodities

Oil prices advanced Thursday tracking a U.S. government report that showed an unexpected drop in gasoline stocks. Crude oil for August delivery gained 24 cents to $69.21 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The Brent crude contract for August delivery gained 12 cents to $70.67 a barrel on the ICE Futures exchange in London.

Gold gained for a second day in London on speculation higher oil costs will revive demand for the metal. Gold for immediate delivery climbed $2.40, or 0.4%, to $645.90 an ounce. Silver increased 18.49 cents, or 1.5%, to $12.46 an ounce.

Currencies

The dollar fell against the euro Thursday as markets awaited the U.S. Federal Reserve interest rate decision. In morning European trading the euro bought $1.3462, up from $1.3445 in late New York trading on Wednesday. The British pound was at $2.0017, up from $1.9978 the night before, while the dollar rose to purchase 123.11 Japanese yen from 122.43 in New York.

[R]5:30AM Gold and silver retreated, while crude oil gained.[/R]

Crude oil for August delivery advanced $1.20 to settle at $68.97 on the New York Mercantile Exchange. The contract reached $69.21 during the session. Brent crude futures advanced 31 cents to settle at $70.53 on London ICE Futures exchange. Gasoline rose 0.77 cent to close at $2.2546 a barrel.

Gold for August delivery declined 50 cents to end at $644.80 an ounce on the Nymex on Wednesday, a day after prices reached their lowest level since mid-January. Silver also fell, with the July contract losing 7 cents to end at $12.21 an ounce. Copper prices edged higher on news that workers at the largest copper mine in Europe, KGHM in Poland, will vote on a potential strike. Nymex copper rose 4.35 cents to settle at $3.357 a pound.

In Chicago, corn prices rebounded on reports that rains have finally reached the parched eastern Corn Belt. Corn for July delivery shed 12.6 cents a bushel to settle at $3.436 on the Chicago Board of Trade. Wheat contract for July delivery retreated, ending down 2.4 cents to $6.06 a bushel. July soybeans shed 3.4 cents to end at $8.034 a bushel.