BHP Billiton, Rio Tinto Boost London

123jump.com Staff
19 Jul, 2007
New York City

London is higher this afternoon ahead of the US open, following upbeat results from IBM pointing to a strong start on Wall Street. Miners are leading the way as commodities rose, with Rio Tinto and BHP Billiton leading the way. Vodafone lifted sentiment on a sharp rise in subscribers. The benchmark FTSE 100 Index increased 1.19%, to 6,645 in early afternoon in London.

[R]10:00AM London is higher Thursday afternoon with mining leading the rally.[/R]

The benchmark FTSE 100 Index increased 1.19%, to 6645 in early afternoon in London.

BHP Billiton Ltd. and Rio Tinto Group led shares of mining companies higher. BHP Billiton Ltd was 3.5% higher and Rio Tinto also advanced 3.5% as copper prices advanced for a second day in Shanghai on worries lower output from Chile, will further cut global supply as stockpiles decline.

Vodafone climbed 0.9%. The company announced it added 9.1 million subscribers in the three months through June, having now 232 million subscribers.

Some stocks advanced on broker comment. LogicaCMG gained 4.25 after UBS AG hiked its recommendation on the Anglo-Dutch computer-services provider to buy from neutral. Segro, the owner of five of the largest business parks in the U.K., climbed 2.3% as UBS also raised its recommendation on the shares to buy from neutral.

National Grid also benefited from broker comment as it advanced 1.5% after Dresdner Kleinwort hiked its recommendation on the owner of the U.K. natural-gas and electricity transmission networks to add from hold.

Other companies also rallied. Colt Telecom Group, phone-service provider, surged 3% as it posted a second-quarter profit of 8.9 million euros, or $12.3 million, compared with a loss in the year-earlier period.

Dairy Crest Group, U.K. dairy producer, gained 4.1% as it said it had a strong performance in the first three months of the fiscal year, led by sales of products such as Cathedral City cheese and Utterly Butterly spread.

Drugmaker GlaxoSmithKline increased 1% as the company said advisers to the European Union recommended approval of a Glaxo’s vaccine that prevents cervical cancer.

[R]9:00AM Asian stocks close higher with Japan up on financial stocks and South Korea boosted by LG Electronics.[/R]

Asian markets finished higher. In Tokyo, the Nikkei 225 Average closed 0.6% higher at 18,116.57. Consumer finance companies advanced on a report that two major firms would merge this year. Promise advanced 5.9% and Sanyo Shinpan jumped 12%. Steelmakers and shipping lines also gained on talks that global economic expansion will power demand for their goods and services. JFE gained 4.4% and Nippon Steel Corp climbed 4.7%.

In Hong Kong, the benchmark Hang Seng Index advanced 0.8% to settle at 23,016.20. Robust first-half economic data boosted stocks. Hutchison Whampoa rallied 4.1% and Cheung Kong soared 4.2%.

In China, the benchmark Shanghai Composite Index edged 0.14% higher to settle at 3,912.94. China''s economy grew at the fastest pace in 12 years in the second quarter and inflation surged, prompting speculation the government will raise interest rates. Property developers ended lower on rate increase concerns, with Beijing North Star losing 1.1% and China Merchants Property Development decreasing 2.5%.

In South Korea, the Kospi Index advanced 0.4% to 1937.90. Seoul Securities rallied to the daily limit of 15% as there are rumors the company is about to take over Kyobo Securities which also surged 13%. LG Electronics settled 1.7% higher after posting a better-than-expected net profit.

In Sydney, resource stocks and banks led the gainers. Miners advanced on higher commodities prices. BHP, the world''s largest mining company and Australia''s biggest oil producer, added 0.7%. Rio Tinto also gained 0.5%. Banks staged a strong performance with Macquarie closing 0.9% higher on upbeat earnings outlook. Commonwealth Bank of Australia rose 1.2% and National Australia Bank gained 1.7%.

[R]7:30AM NY-6:30PM Mumbai Sensex soars 249 points in a large-cap rally.[/R]

The Sensex on BSE advanced Thursday 248.96 points, or 1.63%, and settled at 15,550.13.

The market opened 56 points higher at 15,357, which was also the intra-day low. Steady buying in large-cap stocks especially in the latter part of trading saw the market surge to an intra-day high of 15,593.

The market-breadth was fairly positive as there were three advancers for every two decliners. As 1,503 stocks advanced, 1,104 declined and 70 were unchanged. Of the 30 stocks in the Sensex, only four declined while 25 advanced and one was unchanged.

The turnover on BSE was Rs 5,699 crore, compared with Rs 5,750 crore on Wednesday. On NSE, turnover was Rs 11,591 crore, slightly higher than Rs 11,318 crore on Wednesday.

Economic news

The Finance Minister Palaniappan Chidambaram said in an interview yesterday that India must keep its strict monetary policy in order to curb inflation. Indian bonds declined the most in more than a month after the Finance minister’s word as bond dealers in India had been expecting hoping interest rates to fall after inflation dipped to near a 13-month low.

Trading highlights

Spice was the most active stock with a turnover of Rs 695 crore followed by DLF and Zee Entertainment.

Advancers of the Day

Tata Motors advanced 4.7% to Rs 778 and led the gainers as on fading concerns of interest-rate increases. Auto companies take 50%-75% of their sales from borrowed funds. Reportedly, Tata Motors is considering a bid for luxury British car brands Jaguar and Land Rover from US car maker Ford. Bajaj Auto also gained over 4% to Rs 2,382.

Index heavy, Reliance Industries surged 4.2% to Rs 1,896 on a court decision from the Bombay High Court, which on Wednesday, July 18 J 2007, repealed a decision to forbid Reliance Industries to sell gas from its KG basin field to any other firm except Anil Ambani''s Reliance Natural Resources and state-run NTPC.

Cement stocks were boosted by the infrastructure boom. Grasim 3.5% to Rs 2,996. Other cement shares also advanced. JK Lakshmi Cement was up 4.3% to Rs 143 and UltraTech Cement Company gained 1.4% to Rs 969. ACC was very volatile during the session but managed to finish with a gain of 1.5% to Rs 1,150.

Telecom stocks gained on strong buying interest. The second-largest mobile services firm in India, Reliance Communications advanced 2.1% to Rs 579. The company has sold a 5% stake in its telecom tower business, worth 27,000 crore.

Bharti Airtel advanced 1.4% to Rs 896. Bharti Enterprises, the parent of Bharti Airtel announced on Wednesday, July 18 2007, one of its group companies had purchased a 4.99% in the telecom firm from Vodafone. Bharti''s voting interest in Bharti Airtel is now more than 50%.

IT stocks gained in expectation of global merger & acquisition activity. The second-largest IT services provider in India Infosys Technologies surged 2.6% to Rs 1,997 on speculation that it is close to buying the finance and accounting BPO arm of Philips Global.

Wipro bounced back from a low of Rs 494, and was up 0.19% to Rs 505.40. The company reported before market hours today, July 19 2007, a below estimates 16% increase in net profit to Rs 710 crore in first-quarter of June 2007 compared with the same period last year.

Decliners of the Day

There were only four Sensex stocks which fell today. Hindustan Unilever dipped 0.6% to Rs 198, Reliance Energy lost 0.4% to Rs 686, Cipla declined 0.4% to Rs 205 and Tata Steel, which finished almost flat, down 0.07% to Rs 682.

[R]6:30AM European markets gain Thursday on strong corporate results in tech stocks.[/R]

European stocks advanced Thursday. All 17 markets gained in Europe, except the market in Finland. Of the three major markets, U.K. FTSE 100 index rose 0.8% at 6,618.60, while the German DAX 30 index was up 1% at 7,970.95 and the French CAC-40 index advanced 0.8% at 6,046.29.

In London, stocks gained for the first time in four days, led by Vodafone after the largest mobile-phone company in the world announced the number of subscribers surged by 4.1% in the fiscal first quarter. Vodafone climbed 1.4%.

Miners also advanced as copper prices rose for a second day in Shanghai on concern of lower output from Chile. BHP jumped 2.4% and Rio increased 2.3%. Segro, the owner of five of the U.K. largest business parks, climbed 1.9% as UBS hiked its recommendation on the shares to buy from neutral.

In Frankfurt, German benchmark DAX Index climbed for the first time in three days, led by SAP after the largest maker of business-management software in the world reported earnings that topped analysts'' estimates. SAP rallied 4.7%. The company announced second-quarter profit increased 8.2% to 449 million euros or $619 million, spurred by a jump in license sales in Europe. MAN also advanced 1.4% and Siemens climbed 1.9%.

In Paris, French stocks advanced, as gains were paced by Groupe Danone. Eramet surged after a report that Areva may buy a 37% stake. Danone, the world largest yogurt maker, rose 2.6%. European food and beverage shares advanced after a report that Pepsico and Nestle considered a merger this year. Eramet, which operates the world largest ferronickel plant, soared 13%.

Currencies

The dollar traded near record lows against the euro and the pound Thursday, as the U.S. currency was hit by concerns over the U.S. housing market. The euro rallied to $1.3813 in late morning trading on Thursday, up from $1.3795 overnight in New York, but below the record high of $1.3833 reached in early Wednesday trading.

The British pound also traded near its highest point in more than a quarter-century, trading at $2.0500 Thursday, but down from $2.0533 overnight in New York.

The dollar also slipped against the Japanese yen, falling to 121.87 yen from 121.89 yen in New York late Wednesday.

[R]5:30AM Gold gains Wednesday on inflation worries, oil rallies above $75 a barrel.[/R]

Gold movement depends on four factors including inflation concerns, the movement of the dollar against the euro, bond yields and oil prices. In his comments to Congress Wednesday, Bernanke stated that growth this year will be slightly slower than the Fed had projected in February on weakness in the housing industry with inflation remaining the main concern of the Federal Reserve.

August gold gained $7.80 to settle at $673.70 an ounce on the New York Mercantile Exchange after the Fed’s Chairman speech. September silver settled at $13.29, up 27.2 cents an ounce, while September copper finished at $3.563, up 1.05 cents a pound.

The yield on the benchmark 10-year Treasury note, which rivals gold as a safe-haven investment, declined to 5.01% from 5.07% late Tuesday.

Oil prices settled above $75 a barrel for the first time since August 2006 and gasoline futures rose after the Energy Information Administration reported an unexpected drop in the nation''s gasoline stockpiles.

Crude oil for August delivery surged $1.03 to settle at $75.05 a barrel on the Nymex. Gasoline futures rallied 9.46 cents to close at $2.1953 a gallon.

In Chicago, agriculture futures made a recovery from the sharp decline of the prior two days. November soybeans rebounded 16 cents to settle at $8.765 a bushel on the Chicago Board of Trade. September wheat added 22.25 cents to close at $6.235 a bushel.

December corn rose 5.75 cents to close at $3.425 a bushel. A break of that price could have sparked a fall to the low point of $2.81 a bushel in September, according to investors.