Weak Copper Prices, UBS Worries

123jump.com Staff
07 Mar, 2008
New York City

UK stocks fell after base metal prices declined. China reported a decline in copper inventories, prompting a decline in mining stocks. Broader market fell on probable fire sale of mortgage securities of 25 billion francs at UBS. JD Wetherspoon, pub operator reported 0.4% decline in sales to

1:00 PM New York, 6:00PM London - Commodities drag London stocks lower.[/R]

London stock averages fell after copper and lead prices dropped on the rising stockpiles in China, world’s largest consumer of metal. The unexpected drop in U.S. employment also weighed on stocks.

Market Sentiment

In London trading FTSE 100 declined 1.15% or 66.5 to 5,699.90.

Of the 102 FTSE 100 index stocks, 25 gained, 76 declined, and 1 was unchanged. London Stock Exchange led advancers in the FTSE 100 stocks with a rise of 4.22% followed by an increase in British Airways Plc of 3.47%.

Metal Prices Drop

Copper contract prices rose to a record $8,820 a ton yesterday but closed 1.4% down as stockpiles in China, the world’s largest consumer of the metal rose, after recent price gains delayed purchases by processors.

As a result, copper stockpiles in Shanghai added 3,955 metric tons to 52,840 tons, while that of Zinc also gained the most since April. Lead prices also declined 1.2% to $3,200 a ton.

Thomas Cook to target Emerging Markets

Bloomberg news reported today that Thomas Cook Group Plc will buy back its Indian unit and purchase Egyptian retail outlets and Middle East brand rights to regain worldwide control of its trademark.

Under the Indian stock market rules, the company will buy a 54.9% stake in Thomas Cook India Ltd. from Dubai Financial and a further holding of as much as 20% in an open auction.

The company’s plans comes in the wake of a report by the Travel & Tourism Council that growth rates for travel in Asia, the Middle East and Africa are more than twice as strong as in Europe and the Americas.

Thomas Cook will get a stake of at least 61.8% and as much as 74.9% in the Indian division, which has about 180 travel stores in 40 cities, as well as 22 Egyptian branches run under its name and the rights to its brand in 15 other Middle East nations.

Gainers & Losers

London Stock Exchange led advancers in the FTSE 100 index shares with a rise 4.22% followed by gains in British Airways Plc of 3.47%, in Taylor Wimpey Plc of 2.92%, in Lloyds TSB of 2.48%, and in HBOS Plc of 2.46%.

Schroders Plc-NV led decliners in the FTSE 100 index shares with a fall of 5.70% followed by losses in Schroders Plc of 5.64%, in BHP Billiton Plc of 5.36%, in Antofagasta Resources of 5.24%, and in Anglo America Plc of 4.10%.

Commodity stocks, including Rio, fell after copper prices fell 1.4% and lead declined 1.2%.

Company News

JD Wetherspoon Plc, pub operator reported today first half net profit fell 16% to £18.3 million from £21.7 million a year ago as conditions deteriorated because of a smoking ban in public places since July of 2007. Revenue in the first half dropped 0.4% to £440.2 million but declined 2% at outlets open at least a year.

In addition, Wetherspoon Plc cut its target for pub openings this fiscal year to 23 from 25. However the company raised its first half dividend by 10% to 4.4 pence a share.

Revenues in 2007 were £888 million and net profit after tax was £46.8 million and operated 688 outlets.