FTSE 100 Lost 0.9% in August

123jump.com Staff
31 Aug, 2007
New York City

Stocks in London closed higher for the second day in a row. Investors hoped that the Fed is likley to lower rates for the rest of the year. FTSE 100 index gained 1.5% led by miners and financial companies. Rolls Royce jumped on $400 million order for engines. Thomas Cook warned tough market conditions in the UK and plans to eliminate 3,000 jobs. Higher metal prices led 2% increase in BHP, Antofagasta, and Anglo American. Barclays $1.6 billion of credit to troubled hedge fund Cairn Capital.

[R]2:00PM New York, 6:00PM London-UK shares raced third day in a row led by mining and financial stocks. Barclays to extend Cairn Capital $1.6 billion debt. Thomas Cook offered cautious business outlook. Rolls-Royce wins $400 million share of Tiger Airways V2500 order.[/R]

London stocks rose sharply in Friday trading on higher U.S. shares after Federal Reserve boss Ben Bernanke intimated rates may be slashed to “promote general financial stability.” Financial and mining shares gained the most. London gained 1.5% on top of 1.3% rise in Thursday. Stocks in London fell over 1% in August. Of the 102 FTSE 100 index stocks, 92 rose and 10 declined. Of the index shares, 17 gained over 2%.

In London trading FTSE 100 rose 1.47% or 91.3 to 6,303.30 helped by news U.S. authorities would intervene in the subprime mortgage crisis.

Of the FTSE 100 stocks, mining and financial shares rose heaviest helped by firming global metal prices. Vedanta Resource led gainers surging 4.4% followed by Rio Tinto plc up 3.72% while Imperial Tobacco ended higher 3.22%. William Morrison Supermarkets rose 3.2% while Tate & Lyle ended up 3.11%. Barclays plc gained 2.7% after revealing it would step in and provide a loan to fund Cairn Capital’s $1.6 billion debt.

Oil related and mining stocks gained. Anglo-American rose 2.6% while Lonmin plc, BHP Billiton plc and Antofagasta plc, closed firmer 2.20%, 2.17%, and 1.4% respectively. BP Plc, BG Group plc and British Energy rose over 1.3%. Financials Experian Group, HBOS plc, Man Group, Old Mutual plc and Northern Rock gained a fraction.

Of the index stocks, Home Retail Group led decliners easing 1.1% followed by Mitchells and Butler down 0.8% and Capita Group plc fell 0.53%. Persimmon ended lower 0.52% and Schroders plc fell 0.3%.

Rolls-Royce plc finished higher 1.9% after reporting Friday it had won a $400 million deal, as its share of an order for V2500 engines from Singapore’s Tiger Airways. The contract covers a fleet of up to 50 Airbus A320 family aircraft. The airline already operates a fleet of nine V2500-powered A320s on routes to the rest of South East Asia and Australia. The V2500 is produced by the International Aero Engines consortium (IAE) in which Rolls-Royce is a major shareholder.

Travel firm Thomas Cook announced Friday higher fuel costs had continued to curtail growth of its UK tour business. It said expensive air travel taxes on holidaymakers hampered its ability to raise prices as much as it would need to offset higher fuel costs. The firm also warned the cost of its 2.8 billion pound merger with My Travel would be significantly higher than originally anticipated. Nearly 3,000 jobs will be eliminated after the merger. The tie up of Thomas Cook - owned by German firm KarstadtQuelle - and MyTravel created Europe''s second biggest travel group with a 35% share of the UK package holiday market. The firm said higher sales in Belgium, Holland and France would offset ""challenging"" conditions in Germany, its largest market, and Britain and enable the business to meet its profit forecast for the year.