Rising Oil and Metals Lift Stocks

123jump.com Staff
19 Feb, 2008
New York City

UK stocks edged higher after Barclays reported profit in-line with analysts expectations and commodities prices edged higher. Crude oil edged above $98 in London and above $100 in New York trading and copper rose 3% in London. Barclays reported a net earnings edged higher despite turbulent credit markets but Cadbury Schweppes fell after earnings news.

3:00PM New York, 8:00PM London – Reuters and Thomson receive approval from three anti-trust regulatory commissions to merge after they agreed to sell information databases.[/R]

London stock indexes rose trekking gains posted by commodity stocks as the prices of metals continued to rally on strong demand from China. Barclays rose after reporting higher earnings but Cadbury Schweppes fell after earnings fell 65%.

Market Sentiment

In London trading FTSE 100 stocks advanced 0.34% or 20.3 to close at 5,966.90.

Of the 102 FTSE 100 stocks 58 gained, 4 declined, and 12 were unchanged. International Hotel Group Plc led advancers in the FTSE 100 stocks with a rise of 7.32% after the company reported today that annual operating profit from continuing operations rose 19% from £200 million to £237 million.

Copper and Oil Prices Rise

Commodity prices continued to rally for the third consecutive week as China continues to show huge appetite for commodities and inventories are at seasonally low.

Copper prices rose above $8,000 per ton in London trading today. Zinc, aluminum, and nickel edged more than 2% higher.

Crude oil prices also added on yesterday’s gains after prices rose above $98 per barrel on reports that Iran’s Oil Minister said that OPEC will resolve to cut production when it meets next month.

Crude oil for March delivery climbed 2.9% to $98.28 a barrel today.

Thomson and Reuters Merger Approval

Thomson Corp and Reuters today announced that the European Commission, U.S. Department of Justice, and Canadian Competition Bureau have approved the merger of two companies.

In order to obtain clearance, Thomson has agreed to sell a copy of the Thomson Fundamentals or Worldscope database and Reuters has agreed to sell a copy of the Reuters Estimates, Reuters Aftermarket Research and Reuters Economics (EcoWin) databases.

The sales include copies of the databases, source data and training materials, as well as certain contracts and employees connected to the databases.

Thomson and Reuters will each now seek shareholder and court approvals. The companies expect the transaction to close the week of April 13, 2008.

Gainers & Losers

Intercontinental Hotels Group Plc led gainers in the FTSE 100 stocks with a rise of 7.32% followed by gains in Antofagasta Plc of 5.22% , in Taylor Wimpey of 4.16%, in Home Retail Group of 3.92%, and in Kingfisher Plc of 3.88%.

International Hotels Group rose after reporting today that operating profit including discontinued operations rose 6% from £231 million to £245 million. Final dividend also increased 12% to £14.9.

Financial stocks also gained as well after Barclays Plc reported annual net income for the year ended December 31st grew from £19.4 billion in 2006 to £20.2 billion. Barclays Plc closed up 3.65%. HBOS Plc also advanced 3.13%.

Commodity rose on the rising metal prices. BHP Billiton edged up 2.35% and Rio Tinto Plc increased 2.17%.

London Stock Exchange led decliners in the FTSE 100 stocks with a drop of 6.40% followed by losses in Cadbury Schweppes of 5.39%, in Alliance & Leicester of 3.21%, in Smith & Nephew of 2.68%, and in Reckitt Benckise of 2.60%.

Cadbury Schweppes Plc fell after annual profit plummeted by 65% from a year ago.

International Markets

In Tokyo Nikkei 225 Index closed higher 122.51 or 0.90% to 13,757.91, in Hong Kong Hang Seng index increased 363.92 or 1.53% closed to 24,123.17. Australia ASX 200 index increased 60.70 or 1.09% to close 5,619.10.

In South Korea Kospi Index increased 24.28 or 1.43% to close at 1,720.52, in Thailand SET index closed higher 10.63 or 1.29% to 835.62 and Indonesia JSE Index edged increased 27.17 or 1.01% to 2,711.87. Sensex index in India increased 27.61 or 0.15% to 18,075.66.

In London FTSE 100 Index closed higher 20.30 or 0.34% to 5,966.90, in Paris CAC 40 Index increased 24.03 or 0.49% to close at 4,885.83 and in Frankfurt DAX index higher 34.74 or 0.50% to close at 7,002.29. In Zurich trading SMI decreased 23.98 or 0.32% to close at 7,462.73.