London Led European Markets

123jump.com Staff
05 Dec, 2007
New York City

European markets rallied ahead of the rate decision from the European Central Bank. UK home prices fell for the third month in a row in November prompting speculation of rate cut tomorrow from the Bank of England. Energy stocks rallied in Europe as crude reached higher at the close of European markets. Crude oil declined at close in NY. Dollar advanced on the third quarter U.S. productivity report. Nokia, Porsche, Shell, and Infineon rallied.

[R]4:00PM New York, 10:00PM Frankfurt, 2:30AM Mumbai[/R]

[R]Global Markets Indexes[/R]

In London FTSE 100 Index closed up 178.60 or 2.83% to 6,493.80, in Paris CAC 40 Index increased 111.86 or 2.02% to close at 5,659.07, and in Frankfurt DAX index advanced 135.83 or 1.74% to close at 7,944.77. In Zurich trading SMI rebounded 113.15 or 1.31% to close at 8,758.19.

Dow Jones Industrial Average edged higher by 196.23 or 1.48% to a close of 13,444.96, S&P 500 increased 22.22 or 1.52% to 1,485.01, and Nasdaq Composite Index advanced 46.53 or 1.78% to a close of 2,666.36. In Toronto TSX Composite increased 148.57 or 1.09% to close at 13,728.19.

Of the 30 stocks in Dow Jones Industrial Average, 28 closed higher, 2 closed lower, and none was unchanged.

AIG led the gainers with a rise of 4.5% followed by increases in Microsoft of 4.4%, in Intel of 3.7%, and in Citigroup of 3.6%. McDonalds led the decliners with a fall of 0.9% followed by Disney with a loss of 0.2%.

Of the stocks in S&P 500, 426 closed higher, 71 fell, and 3 were unchanged. Seven stocks fell more than 3% and seventy five increased 3% or more.

Circuit City led the gainers with a rise of 7.8% followed by increases in Paccar of 7.7%, in EDS of 7.5%, in Freddie Mac of 7.3%, in Monster Worldwide of 6.4%, and in JDS Uniphase of 6.2%. MBIA fell 16% after Moody’s said that company may need more capital followed by losses in Comcast of 12%, in Ambac of 8.9%, and in E*Trade of 3.8%.

In Tokyo Nikkei 225 Index added 128.69 or 0.83% to close at 15,608.88, in Hong Kong Hang Seng index closed up 465.86 or 1.61% to 29,345.45, in Australia ASX 200 closed down 22.70 or 0.35% to close 6,508.10.

In South Korea Kospi Index increased 20.37 or 1.06% to close at 1,938.20, Thailand closed up 2.22 or 0.27% to 833.34, and Indonesia edged higher 15.12 or 0.55% to 2,68.06. India soared 208.57 or 1.07% to 19,738.07.

In Latin Markets Mexico led the gainers with a rise of 2.63% followed by increases in Brazil of 2.28%, in Chile of 1.8%, and in Argentina of 1.14%.

Bond Yields edged lower on 10-year U.S. bonds to 3.94% and 30-year bonds decreased to 4.42%.

[R]Commodities, Metals, and Currencies[/R]

Crude oil declined $1.30 to close at $87.02 per barrel for a front month contract, up 40.00% for the year, natural gas increased 4 cents to $7.19 per mBtu, and gasoline futures decreased 4.07 cents to close at 221.10 cents per gallon.

Gold edged lower $3.90 in New York trading to close at $803.70 per ounce, silver closed down 5 cents to $14.46 per ounce, and copper for front month delivery increased 2.00 cents to 304.00 cents per pound and in London trading closed down $107.00 to $6,657.00.

Dollar edged higher against euro to $1.4604 and higher to 110.935 yen.


[R]1:00PM New York – U.S. stocks gained after economic reports and expectations of a rate cut.[/R]

Dow Jones Industrial Average rose sharply at 163.80 13,411.96, Nasdaq rose 42.83 to 2,662.02, S&P 500 gained 18.63 to 1,481. 90.

Economic reports and hopes of rate cut next week lifted market averages.

Of the 30 stocks in Dow Jones Industrial Average 27 rose and 3 declined.

AIG led the gainers in the index with a rise 4.4% after the company said that the ‘sub-prime’ investment is manageable. Microsoft rose 3.8% followed by Intel gained 3.5% and United Technology added 2.6%.

Of the stocks in S&P 500 index 385 stocks rose, 111 declined, and 4 were unchanged.

Paccar Inc led the gainers with a rise of 7.7% followed by JDS Uniphase added 6%, Electronic Data Systems increased 6%, and Circuit City edged higher by 5.7%.

The Labor Department revised sharply higher third quarter productivity to annualized 6.3% form 4.9%. The strength in the productivity lifted market averages at the opening and in the morning trading.

Institute of Supply Management reported that service industry index in November declined to 54.1 from 55.8 in October largely on a decline in new orders.

Private sector employment rose in November rose by 189,000 according to a survey published by Automatic Data Processing after adding 166,000 in October.

A day after the Bank of Canada lowered rates the Reserve Bank of Australia left rates unchanged. The Bank of England and the European Central Bank is expected to announce their decisions on Thursday with high expectations of rate reduction. The Federal Reserve Bank in the U.S. expected to make its rate decision next week.

[R]5:00AM New York, 7:00PM Tokyo - Tokyo stocks closed up 0.83%. Liberal Democratic Party to begin meeting today to consider establishing a sovereign wealth fund.[/R]

Japan’s stock averages snapped morning losses after the yen appreciated against the dollar and closed at 110.33.

In Tokyo trading Nikkei 225 reversed a 0.7% slump in the morning session to rise 0.83% or 128.69 to 15, 608.88, while the broader Topix Index snapped a 0.8% decline in morning trade to close 0.73% or 11.13 to 1,526.63.

In the first section of the Tokyo Stock Exchange 8.7 billion shares worth 1.0 trillion yen were traded and 354 shares valued at 7.8 billion yen changed hands in the second section.

Of the Nikkei 225 stocks 135 climbed, 82 declined and 8 were unchanged. Nikon Corp led gainers with a rise of 6.38%, followed by Kyowa Hakko Kog soared 5.89%. Exporters gained as well. Canon Incorporated climbed 0.87%, Toyota Motor Corporation surged 0.16% and Honda Motor Corp firmed 0.54%.

U.K Daily Telegraph reported yesterday that the Bank of England has prepared contingent plans to bail depositors with troubled mortgage lender Northern Rock if it were to be nationalized.

Nikkei news reported today that Mizuho Financial Group would inject 150 billion yen into Mizuho Securities Company after the losses in the U.S. sub-prime investments. Under the terms of the transaction, the securities unit would raise the money through selling new shares to Mizuho Corporate Bank.

Bloomberg news reported today that secretary general of the Japan’s Liberal Democratic Party 40-member panel Kotaro Tamura said the panel would begin deliberations today to establish a sovereign wealth fund. It is believed that the fund would enable the Japan to manage interest earned from the nation’s foreign exchange reserves, public pensions and real estate holdings more efficiently.

Liberal Democratic Party policy chief Sadakazu Tanigaki said last week the next Bank of Japan Governor to replace Toshihiko Fukui in March 2008 should have experience so that the “Bank of Japan to effectively communicate with financial markets”.

Tanigaki added that global credit market turmoil had made it imperative for the new Governor to closely monitor the world economy and market before setting monetary policy. Economists favor deputy Governor Toshiro Muto to take over the post.

Of the Nikkei 225 index shares Nikon Corp led advancers with a rise of 6.38%, followed by gains of 5.89% in Kyowa Hakko Kog, 4.97% in Casio Computer, 4.76% in West Japan Railway, and 4.66% in Clarion Company Limited.

Retailers firmed after UBS Securities said domestic demand and personal consumption might recover on smaller increase in pension and tax burdens. Seven & I Holdings rose 3.7%, J Front Retailing surged 3.3%, and Marui Group soared 3.7%.

Toho Zinc Company Limited led declining Nikkei 225 index shares with a decline of 4.35% followed by losses in JFE Holdings of 3.65%, in Oki Electric Industries of 3.61%, in Nisshinbo Industries of 3.55%, and Comsys Holdings of 3.36%.

Commodity related stocks declined after the price of metals retreated. Nippon Steel slumped 2.29% and Sumitomo Metal Mining slid 2.95%.

The mobile communications company sold 20 billion yen of 1.5% seven year bonds to yield 38 basis points more than Japanese government securities. According to Mizuho Securities Company, KDDI Corp also priced 40 billion yen of the 1.3% five year bonds to yield 32 basis more than the government debt, while pricing 20 billion yen of 2.07% of three year securities to yield 29 basis point more than the government bonds.

[R]3:00AM New York, 5:00PM Tokyo - The Australia index slid 0.4% after loses in mining stocks.[/R]

ASX 200 Index declined by 0.4% or 22.70 to close at 6,508.10.

BHP Billiton was lower at 0.9%, Rio Tinto lost by 2.6% and Newcrest mining slid 0.2%.

Preliminary stock turnover was 2.06 billion with shares worth $5.78 billion changing hands, with 546 stocks up, 719 down, and 351 unchanged. The top traded stock by volume was men''s merchandiser Retail Star with 402.55 million shares changing hands valued at $11.17 million.

Australia''s property giant, Lend Lease today confirmed having held talks with Mirvac Property Group about a potential transaction which could include a merger. The company however indicated that it had no expectations and that it was unsure about how the deal would turn out.

The company said it would constantly evaluate alternatives to maximize shareholder value from its businesses and from time to time considers proposals from third parties. Lend Lease shares were higher at 2.3%.

Australia''s largest builder, Leighton Holding share gained after the company announced today that its subsidiary Leighton International had been awarded A$740 million ($650 million) of new work in Dubai and Abu Dhabi in the United Arab Emirates, through its 45%-owned associate Al Habtoor Engineering.

The company said in a statement that it had secured a $520 million contract for the construction of the new JAFZA convention centre in Dubai for the Jebel Ali Free Zone Authority, and two hotels for Aldar on Yas Island in Abu Dhabi worth a total $130 million.

""These new contracts are further evidence of the tremendous opportunities for growth for Leighton International in the Arabian Gulf region, and the UAE in particular,"" said David Savage, Managing Director of Leighton International in the statement.

The JAFZA convention centre complex will comprise twin towers for the convention centre, a food court, a 33-storey office complex and seven-storey hotel.

The project for Aldar comprises the construction of two separate 4-star hotels on adjacent plots on Yas Island in Abu Dhabi. The first hotel comprises 400 rooms and 30 suites; the second 200 rooms and 10 suites. Construction will commence immediately and will be completed in September 2009.

Last month Leighton International, through Al Habtoor Engineering, secured the $290 million (A$330 million) JW Marriott Hotel in Abu Dhabi.

The project, for Abu Dhabi National Hotels, represented the first contract won by Al Habtoor Engineering since it merged with Leighton International''s operations in the Arabian Gulf in September this year.

Xstrata Coal Pty Limited today announced its intention to make an unconditional all cash offer to acquire all of the issued and outstanding shares in Resource Pacific Holdings Limited for A$2.85 per share, valuing Resource Pacific''s issued share capital at approximately A$960 million. The offer eclipsed an all-share bid for the Australian mining company by a local rival, New Hope.

Xstrata Coal Chief Executive, Peter Coates, said: ""This is a highly attractive offer for Resource Pacific shareholders, providing the immediate opportunity to realise a cash premium for their investment in a single mine operation.""

Xstrata Coal''s cash Offer is priced at a 85% premium to the 30 day volume weighted average price1 of Resource Pacific shares up to and including 25 September 2007, the day prior to the announcement of New Hope''s takeover offer.

The company also said that its offer price also represents a 78% premium to the A$1.60 per share subscription price of Resource Pacific''s recent rights issue – which was priced by the company just over one month ago and represents more than 30% of the company''s current issued share capital.

Xstrata Coal also announced today that it has entered into a co-operation agreement with Marubeni Corporation, Resource Pacific''s largest shareholder. As a result, Xstrata Coal now has a relevant interest in Marubeni Corporation''s 10.28% shareholding in Resource Pacific. Together with its existing interest of 5.28% acquired by equity swap arrangements and on-market purchases, Xstrata Coal has a total relevant interest of 15.56% in Resource Pacific shares.

""We believe our cash Offer recognises the full value of Resource Pacific''s Newpac mine and offers an attractive and risk-free premium to shareholders. Xstrata Coal has a proven history of successful longwall mining in the New South Wales Hunter Valley, with the skills, capabilities and financial stability required to achieve Resource Pacific''s potential,"" Mr Coates said.

Newpac is an underground semi-soft coking coal and thermal coalmine located in the Hunter Valley coalfields of NSW, in close proximity to a number of Xstrata Coal operations. Xstrata Coal also owns the mining lease over Newpac.

The Offer will be made by Titan Holdings Finance Pty Limited, a subsidiary of Xstrata Coal, by way of an off-market takeover bid under the Australian Corporations Act 2001.

Xstrata Coal has already received approval from the Australian Foreign Investment Review Board in relation to this Offer. No other regulatory approvals are required. Resource Pacific jumped 3.4% above Xstrata''s bid and 31% more than an earlier offer by New Hope Corp.

Australian property trust and homebuilder, Mirvac Group''s stock gained to a record after announcing that it had held talks with larger rival Lend Lease Corp. about ``potential transactions.''''

There was speculation in the local media that a reverse takeover was close to being completed. Shares of Mirvac rose by 2.7%, raising its market value of A$6.2 billion ($5.4 billion).

A combined group would marry Lend Lease''s construction projects, which span six continents and include jobs for the London 2012 Olympics and the U.S. Air Force, with Mirvac''s almost 30,000 residential property developments in Australia and A$13.3 billion in funds under management.

A merger would create the nation''s second-largest real estate group by market value, trailing shopping mall owner Westfield Group.

Coca-Cola Amatil Ltd today advised that its 50:50 alcohol joint venture company with SABMiller plc, Pacific Beverages Pty Limited has acquired 100% of the issued shares of Bluetongue Brewery Pty Ltd from a syndicate including John Singleton and others.

The company said in a statement that Pacific Beverages has also entered into a long-term agreement with John Singleton to further develop and strengthen the Bluetongue premium beer brands.

Bluetongue was launched in November 2003 and operates from an established boutique brewery of in excess of 50,000 hectolitres in capacity in Cameron Park near Newcastle, New South Wales (NSW).

Bluetongue''s premium beer brands include Bluetongue Premium Lager, Bluetongue Premium Light, Bluetongue Traditional Pilsner, Bluetongue AlcoholicGinger Beer, and Bondi Blonde.

CCA''s Group Managing Director, Terry Davis said, ""The acquisition of Bluetongue Brewery adds a fast-growing and uniquely Australian premium beer brand to Pacific Beverages'' existing portfolio of imported premium beers and fits perfectly with our strategy of developing our presence in the Australian premium beer market. We have been looking for some time for a premium local beer brand and could not have found anything better positioned in the category than Bluetongue.

""The sales penetration achieved by Pacific Beverages in its first twelve months of operation has been outstanding and consumer acceptance of our premium beer brands has exceeded our expectations.

""Our core capabilities in sales, distribution and customer relationships, and SABMiller''s brewing and premium beer brand management expertise, have delivered beyond our internal targets and will now be utilised in further developing the Bluetongue premium beer brands in Australia,"" Mr. Davis said.

John Singleton said, ""The Bluetongue brand has grown well beyond my expectations and its acquisition by Pacific Beverages will give it the opportunity to fully realise its potential. With CCA''s sales and distribution strength, Bluetongue will now be better placed to compete more effectively on a national scale in the highly profitable Australian premium beer market.""

The acquisition price is subject to confidentiality and therefore not disclosed. However, the cost is not material to CCA or SABMiller.

The dollar closed weaker today after indications the tightening bias of the Reserve Bank of Australia (RBA) may be easing, following the release of weaker than expected gross domestic product (GDP) figures. At the close, the dollar was trading at US$0.8702/07, down from yesterday''s close of US$0.8755/60.

Of the ASX 200 index shares, Leighton Holdings led the gainers with a rise of 5.5% followed by increases in Murchison Metals by 4.7%, in Transfield Service by 3.8%, 3.6 in Worleyparsons and 3.5% in Cons Metals.

Of the ASX 200 index stocks Hills Industries led the decliners with a fall of 8.4% followed by losses in Bendigo Bank Limited of 5.2%, Futuris Corp Limited by 4.7%, 4.6% in STW Communication and 4.4% in Salay Milay Mini.

In other stocks Westpac Banking was up 0.8%, New Zealand Bank was lower at 0.4% and National Australian Bank shed 0.5%. In the energy sector Oil Search was up 2.6%, Santos gained 3.5% and Woodside Petroleum shed 1.4%. In the gold sector Lihir was weaker at 0.5%.

The retailers were mixed Woolworths gained by 1.2%, Harvey Norman was higher at 1.3%, David Jones slid 0.8% and Wesfarmers Limited shed 0.9%. In the media stocks News Corp added 0.4% while its non-voting scrip found seven cents to $23.57, PBL media spin-off Consolidated Media Holdings was down 1.9% and Fairfax slid 0.6%.