Stocks Gain Trimmed, Commodities Rise

123jump.com Staff
14 Aug, 2008
New York City

UK stocks gained as much as 1.7% on a sharp rise in commodities stocks. The benchmark index closed up 0.9% after the release of inflation data in the U.S. Euro zone inflation reached 4% in the last month according to the latest data released today. British Air, American Airlines and Iberia signed a joint business tie up and plan to seek approval from the U.S. and European authorities. Barclays fell after analyst at Goldman Sachs estimated

[R]2:00PM New York, 6:00PM London – Commodities stocks gain as investors search for bargains. The gains in the benchmark index were trimmed on a rise in inflation in Europe and in the U.S.[/R]

UK stocks rose fractionally as commodity stocks, buoyed by rising metal and oil prices bested the sharper than expected rise in inflation in the U.S. Inflation in UK is hovering above 4.4% in July as food prices surged above 13.7% and across the euro zone surged to 4% according to the statistical agency Eurostat latest data released today.

Investors bought commodities stocks as they traded near six-month lows.

Market Sentiment

In London trading FTSE 100 increased 0.9% or 48.8 to 5,497.40. Of the 102 FTSE 100 stocks 58 rose, 40 declined, and 4 were unchanged. Antofagasta led advancers in the index shares with a rise of 4.74% after oil prices rose to above $116 per barrel as U.S. inventories unexpectedly slumped.

American Airlines, British Airways and Iberia in tie-up

American Airways, British Airways and Iberia reported in a joint statement today that they have signed a joint business agreement on flights between North America and Europe and have pledged to expand their global co-operation.

The three airlines- including Finnair and Jordanian- plan to file today for worldwide anti-trust immunity from the U.S. Department of Transportation and will also seek regulatory approvals from authorities in the European Union.

Under the arrangement though the entities will continue to function as separate businesses, they will cooperate on sharing flights between the United States, Mexico and Canada, and the European Union, Switzerland and Norway.

The combined route network will service 443 destinations in 106 countries with more than 6,200 daily departures and more frequent and convenient schedule options.

In addition, they will expand their code share arrangements on flights within and beyond the EU and US.

Through the alliance called Oneworld, British and American Airlines hope to compete on an equal footing with six airlines in SkyTeam and nine Star Alliance airlines that already have the anti-trust immunity.

Gainers & Losers

Antofagasta led advancers in the FTSE 100 index shares with rise of 4.74% followed by rises in Anglo America of 4.73%, in Kazakhmys of 4.73%, in Eurasian Natural of 4.65%, and BHP Billiton of 4.63%.

Commodity stocks gained as oil prices rose above $116 a barrel as crude oil inventories declined 400,000 barrels at the end of the last week to 296.5 billion barrel, near the low end of its average compared with the forecasted 200,000 barrels, as tropical storm Edouard disrupted imports. Vedanta Resources soared 3.10%, Rio Tinto gained 3.05%, and Xstrata advanced 2.90%.

Rolls Royce led decliners in the FTSE 100 index shares with a fall of 3.85% followed by losses in First Group Plc of 3.04%, in TUI Travel of 2.19%, in Man Group of 2.08%, and London Stock Exchange of 1.97%.

Financial stocks also slid as Goldman Sachs Group Inc. said the bank might writedown £1.5 billion. The stock fell 1.42% as a result and HBOS shed 0.57% as well.

British Land Corp Gross Rental Income Falls by £19 million

British Land Corp reported on its Web site today that gross rental income in the first quarter ended June 30 fell by £19 million as a result of the sales, while new lettings and rent reviews have generated increased income of £8 million.

Gross rental income also declined 6.1% to £169 million from £180 million in the same period a year earlier.

British Land Corp added that net rental income fell by 3% from a year ago due to sales of properties with higher non-recoverable expenses.

Exposure to occupiers in administration represents only c.0.3% of total rent.

Underlying fees and other income stood at £5 million from £22 million in the comparable period a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 66.25 or 0.51% to 12,956.80, Hang Seng index in Hong Kong increased 99.39 or 0.47% closed to 21,392.71. ASX 200 index in Australia increased 29.50 or 0.60% to close 4,981.10. The KL Composite index in Malaysia decreased 3.10 or 0.28% closed to 1,109.43.

The Kospi Index in South Korea increased 9.47 or 0.61% to close at 1,572.19, SET index in Thailand closed higher 4.00 or 0.57% to 705.60 and JSE Index in Indonesia increased 43.12 or 2.09% to 2,106.64. The Sensex index in India decreased 368.94 or 2.44% closed to 14,724.18.

Europe Markets Review

In London FTSE 100 Index closed higher 48.80 or 0.90% to 5,497.40, in Paris CAC 40 Index increased 17.94 or 0.41% to close at 4,420.91 and in Frankfurt DAX index higher 20.02 or 0.31% to close at 6,442.21. In Zurich trading SMI increased 12.96 or 0.18% to close at 7,206.46.