Tesco gains on sales

European markets were lower Tuesday, hurt by concerns that a new move by China to tighten monetary policy by raising reserve requirements for Chinese banks could slow down economic recovery around the globe.

The FTSE 100 was 0.71 percent lower to 5,498.71 in London, while the FTSE 250 fell 1.26 percent to 9,603.47.

Retailer Tesco added 0.75 percent after it said its sales in the six weeks ending 9 January were up 4.9 percent in stores open at least a year.

That figure excludes gasoline sales and includes an adjustment for value-added tax.

Metals prices were lower on concerns that the tightening of monetary policy in China will hurt demand there, which has boomed recently.

In consequence, four of the five top decliners on the 100 came from the mining sector, led by gold miner Fresnillo (LSE: FRES) which was also the biggest decliner on the index as it dropped 5.16 percent.

Lonmin (LSE: LMI) was 5.08 percent lower while Kazmakhys (LSE: KAZ) fell 3.82 percent and Xstrata (LSE: XTA) was down 3.31 percent.

The real estate sector was mixed, with Land Securities Group (LSE: LAND) leading gains on the 100 as it was up 1.54 percent, while over on the 250 St Modwen Properties (LSE: SMP) was the best performer in the sector, adding 3.64 percent.

The biggest gainer on the session in London was kitchen cabinets builder Galiform (LSE: GFRM), which was up 11.88 percent on the 250, while the worst performance on that index and in London came from investment manager Ashmore Group (LSE: ASHM) with a decline of 5.73 percent.

The FTSE Eurofirst 300 was down 0.92 percent to 1,053.99 while the IBEX fell 0.9 percent to 11,966.1, the CAC-40 was 1.06 percent lower to 4,000.05 and the Dax dropped 1.61 percent to 5,943.

There were just 3 gainers on the CAC-40 and only 2 stocks were higher on the Dax.

Asia-Pacific markets were mixed after new moves by China to tighten monetary policy.

Tokyo, however, saw the Nikkei hit a new 15-month closing high as it added 0.75 percent to 10,879.14, while the Topix index was up 1.36 percent to 954.13 but the Mothers market fell 0.17 percent to 405.28.

Japan Airlines (TYO: 9205) dropped 44.8 percent, going untraded on the session, as investors grew more concerned that the air carrier will declare bankruptcy.

All Nippon Airways (TYO: 9202), however, added 4.2 percent on the possibility that its business will get a boost due to JAL’s troubles, and Central Japan Railway (TYO: 9022) was up 4 percent on analyst speculation that it could benefit if JAL is delisted.

Manufacturers of construction machinery saw gains after US group Caterpillar (NYSE: CAT) was up on new data out of China showing demand for oil and copper implied booming construction and manufacturing.

Komatsu (TYO: 6301) added 5.4 percent while Hitachi Construction Machinery Co. (TYO; 6305) was 2.2 percent higher.

Traders also benefited from good commodities news out of China, with Mitsui & Co (TYO: 8031) up 3 percent as Mitsubishi Corp (TYO: 8058) gained 2 percent.

Other gainers in the region included the Kospi, which added 0.27 percent to 1,698.64 while the Shanghai Composite was up 1.91 percent to 3,273.97.

The Taiex was 0.17 percent lower on the session to 8,309.37, the Hang Seng fell 0.38 percent to 22,326.64, and the Sensex and the Straits Times Index each dropped 0.59 percent, to 17,422.51 and 2,916.11 respectively.

In Australia, the Sydney Ordinaries fell 1 percent to 4,931.6 while the S&P/ASX200 dropped 1.03 percent to 4,899.5.

The news of China’s new requirements for bank reserves hurt US markets, as did Alcoa’s (NYSE: AA) report saying that earnings and revenue were down in the fourth quarter of 2009 and a warning from Chevron (NYSE: CVX) that its quarterly report could disappoint.

At just before 1 p.m. in New York, the Dow Jones Industrial Average was down 0.84 percent to 10,574.89 while the Nasdaq Composite had dropped 1.61 percent to 2,275.19 and the S&P 500 was 1.12 percent lower to 1,134.18.

Prices for oil and metals were lower in New York.

Tags: Asia-Pacific markets, commodities, European markets, London markets, Wall Street