FTSE Slides, BT Group Shines

Ivaylo
29 Jun, 2007
New York City

The UK benchmark index declined on Friday despite BT Group advance after its chief executive made a strong comment on the company

[R]9:30AM The UK benchmark index is slightly down in spite of a strong opening.[/R]

The UK benchmark index is lower in mid-morning trading on Friday. The FTSE 100 was down 20.5 points at 6,551.0.

Advancers

BT Group was the leading advancer in the FTSE 100 stocks. The telecommunications group gained 1.3% as its chief executive said that analysts were too pessimistic about the prospects for revenue growth of the telecom provider. Falling sharply this week after a profit warning, lender Northern Rock, rallied 1.3% while oil stocks were also stronger. Royal Dutch Shell gained 1.2% and BP added 0.8%.

Down in the market, mid-cap Berkeley Group surged 1.1 per cen as the housebilder posted a 14% increase in annual profits. Another mid-cap, Sports Direct International, gained 1.6% after the retailer announced the $135 million purchase of Everlast, most famous for making boxing equipment.

Decliners

Real estate stocks kept their losing streak on worries about increasing interest rates and the US subprime mortgage market. Segro declined 4.2%, Hammerson shed 4% and Liberty International declined 2.8%.

[R]8:30AM Asian markets finish mixed with Japan higher and China, HK lower.[/R]

Asian markets ended mixed on Friday. In Tokyo, the Nikkei 225 Average ended 1.2% higher at 18,138. Toshiba firmed up 3.9% and Takeda Pharmaceutical advanced 1.5% on strong sales guidance. In Hong Kong, the Hang Seng Index shed 0.8% to close at 21,772. HBSC declined 0.7%, and China Mobile was down 1.1%, leading the decliners. Oil stocks finished mixed despite higher oil prices, as Cnooc finished up 0.6%, but Sinopec lost 0.8% and PetroChina was off 0.9%.

In China, the benchmark Shanghai Composite Index dipped 2.4% to settle at 3,820. Insurance group Orient Group declined by the daily 10% limit, China Life Insurance lost 4% and Shanghai International Airport shed 4.3%. South Korean Kospi Index also declined 0.5% to 1,743. Hyundai Mipo Dockyard lost 2.7% and Daewoo Shipbuilding & Marine Engineering shed 4.6%. In Australia, the S&P/ASX 200 index advanced 0.2% to 6,274. Resource stocks advanced with Alumina rising 2.8%, BHP Billiton ending up 0.4%, and Rio Tinto advancing 0.4%.

[R]7:30AM NY-6:30PM Mumbai Sensex zooms 146 points on a large-cap rally.[/R]

The Sensex on BSE finished 145.94 points higher, or 1.01%, at 14,650.51, just 73 points away from its all-time intra-day high of 14,724.

The market-breadth was very strong as there were 1,484 stocks which advanced, 1,107 which declined and 90 which were unchanged. Of the 30 stocks in the Sensex, 22 advanced, while the rest declined. The turnover on BSE was Rs 4,817 crore, slightly lower than Rs 4,848 crore on Thursday. On NSE, the turnover was Rs 10,681 crore, much lower than Rs 12,193 crore on Thursday.

Economic news

The wholesale weekly inflation rate decreased to a 13-month low as prices of food and cereals dropped. Wholesale prices advanced 4.03% in the week ended June 16 from a year earlier, down from 4.28% in the previous week, beating analysts’ expectations for 4.13%.

The Indian rupee advanced 0.2% to 40.765 against the dollar in morning trading in Mumbai. It has risen 6.7% this quarter, the best performance among ten of the most traded Asian currencies. The rupee advance is according to investors due to the booming economy and strong market attracting a lot of investment from abroad.

Trading highlights

SBI was the most active stock with a turnover of Rs 154.80 crore followed by GMR Infrastructure and Reliance Industries.

Advancers

Reliance Energy zoomed nearly 6% to Rs 614. Reliance Energy’s subsidiary Rosa Power Supply, on June 26 2007 took out long-term loans of around Rs 2,000 crore for the first stage of its 600 MW power project. HDFC Bank soared nearly 5% to Rs 1,144. Other banking stocks also rose. ICICI bank rose 1.3% to Rs 955 and the State Bank of India, advanced 3.7% to Rs 1,523. SBI surged as reports circulate that the bank intends to launch a private equity fund with a corpus of $1 billion.

Cement shares surged for the second straight day. Cement large-cap ACC gained 3.9% to Rs 934 and Grasim was up 0.6% to Rs 2,638. Pharmaceutical stocks also gained with Cipla up 2.7% to Rs 208, and Ranbaxy Laboratories rising 2% to Rs 355. Capital goods stocks were in demand too. BHEL advanced 3.3% to Rs 1,538 and L&T gained nearly 2% to Rs 2,196. Index heavy Reliance Industries gained 0.5% to Rs 1,700.

Decliners

Hindalco plunged 5.2% to Rs 160. Auto large-cap Maruti Udyog lost 0.9% to Rs 743 while telecom services provider Bharti Airtel dipped 0.8% to Rs 836. Oil exploration large-cap ONGC also lost, down 0.5% to Rs 902 and Gujarat Ambuja Cements declined 0.4% to Rs 125.

[R]7:30AM European markets gain slightly on Friday, cautiously responding to Fed’s decision.[/R]

European markets edged higher on Friday. The German DAX 30 gained 0.2% at 7,937.86, the French CAC 40 rose 0.2% at 6,017.92 and the U.K. FTSE 100 slipped 0.1% at 6,567.30.

Advancers

BT Group advanced 1.7% as according to CEO Ben Verwaayen analysts are underestimating sales growth. U.K. builder Berkeley rose 2.3% after the adjusted profit of the company advanced a faster-than-forecast 12%. Forklift maker Linde rose 3.3% and Swatch was up 2.9% after Deutsche Bank hiked its rating to buy on favorable trends in the watch industry and on margin hopes.

Decliners

Segro tumbled 4% as HSBC cut the property company rating to neutral from overweight. U.K. coal power firm Drax dropped 2.8% after announcing results in line with expectations. Security Land shares slipped 0.8% and British Land fell 1.1%.

Commodities

Oil prices were steady below $70 a barrel Friday after jumping above that mark in the previous session the first time in ten months on concerns about gasoline supplies. Crude oil for August delivery gained 15 cents to $69.63 a barrel in electronic trading on the New York Mercantile Exchange. Gold opened Friday at a bid price of $647.90 a troy ounce, down from $648.80 late Thursday.

Currencies

The U.S. dollar was trading at 123.44 yen midafternoon, up from 123.18 yen late Thursday in New York. The euroo rose to $1.3456 from $1.3432. The British pound also climbed slightly to $2.0027.

[R]5:00AM Gold and silver gain Thursday while oil advances on concern of gasoline supplies.[/R]

Gold often trading inverse to the dollar, has a less direct relationship with the price of oil. August gold closed at $650.40, up $5.60 an ounce. Silver rose 16.9 cents to close at $12.379 an ounce on the Nymex. Nickel and tin made gains on the London Metal Exchange. Increasing inventories of nickel and tin held by the exchange pressured prices lower. Copper led the rest of the complex higher with a more than 2% gain. Nymex copper also rose, adding 7.25 cents to end at $3.4295 a pound.

Gasoline for July delivery rose 1.21 cents to settle at $2.2667 a gallon on the New York Mercantile Exchange. Crude oil for August delivery surged to $70.52 then retreated to close up 60 cents at $69.57 a barrel.

Agriculture futures ended mixed on the Chicago Board of Trade. The market is awaiting two reports from the U.S. Department of Agriculture due out before the market opens on Friday. Corn for July delivery lost 4.2 cents to settle at $3.394 a bushel. July soybeans added 6.2 cents to close at $8.096 a bushel, and July wheat rose 3 cents to settle at $6.09 a bushel.