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Wednesday 07th of July 2010
April 23, 2010    

Taylor Wimpey leads London homebuilders on US home sales data

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by Elaine Frei
Taylor Wimpey leads London homebuilders on US home sales data

European equities markets were higher Friday on some optimistic data and on quarterly reports that were better than expected.

The Ifo Institute reported that German business confidence was up more than expected in March, rising to 101.6 in April, a two-year high, from 98.2 in March after analysts expected a gain to only 98.7.

However, the UK’s Office of National Statistics said that the gross domestic product there only added 0.2 percent in the first quarter, from the fourth quarter of 2009, growing only half as much in the quarter as had been expected.

The FTSE 100 added 1.03 percent to 5,723.65 in London, while the FTSE 250 gained 1.59 percent to 10,601.54.

Homebuilders were among the biggest gainers in London after the US Commerce Department reported that new home sales in the United States were up by 27 percent in March, the biggest monthly percentage gain in 47 years.

Taylor Wimpey (LSE: TW), which gets a third of its revenues from the US, added 9.76 percent to lead gains on the 250 and in London, while elsewhere in the sector, Barratt Developments (LSE: BDEV) was up 4.52 percent, Persimmon (LSE: PSN) was 3.81 percent higher and Bovis Homes (LSE: BVS) gained 3.45 percent.

The travel and leisure sector was also a big winner on the session as travel began to return to normal after the recent closures of airports and airspace in Europe due to ash in the air from the volcanic eruption in Iceland.

Cruise ship operator Carnival (LSE: CCL) led gains on the 100 and in the sector as it added 5.87 percent, while hotels operator InterContinental Hotels Group (LSE: IHG) was up 4.37 percent and British Airways (LSE: BAY) gained 3.86 percent as both were also among the top five gainers on the 100.

The insurance sector was mixed, with Aviva (LSE: AV) down 1.28 percent for the worst performance in the sector, while Prudential (LSE: PRU) fell 0.82 percent and Resolution (LSE: RSL) was 0.84 percent lower.

Auto insurer Admiral Group (LSE: ADM) led gains in the sector as it added 1.35 percent.

Chipmaker ARM Holdings (LSE: ARM) turned in the worst performance on the 100 as it dropped 1.74 percent after two days in a row as the best performer on the index, while energy efficiency specialist Eaga (LSE: EAGA) dropped 1.39 percent and was the worst performer on the 250 and in the industrial goods and services sector.

The FTSE Eurofirst 300 was up 0.69 percent to 1,091.35 while the CAC-40 added 0.68 percent to 3,951.3, the IBEX was 0.89 percent higher to 10,918.2 and the Dax gained 1.47 percent to 6,259.53.

Among companies reporting good results in the first quarter, Swedish truck maker Volvo (OMX: VOLV.B) added 10 percent after it said it saw a gain in net income in the first quarter, against an expectation by analysts that it would report a loss.

Markets were mixed in Asia, with some held back by continuing concerns about moves by China to cool down property speculation and on debt-related issues in Greece and elsewhere.

The Nikkei 225 was down 0.32 percent to 10,914.46 in Tokyo, but the Topix index was fractionally higher to 978.2 and the Mothers market added 1.27 percent to 497.13.

Banks were lower after Fitch Ratings warned that Japan’s AA rating could be in jeopardy over growing debt, with Mizuho Financial Group (TYO: 8411) down 1.08 percent while Sumitomo Mitsui Financial Group (TYO; 8316) fell 1.22 percent and Mitsubishi UFJ (TYO: 8306) dropped 1.38 percent.

Honda Motor was up 1.1 percent on the possibility that its operating profit was up 90 percent in fiscal year 2009.

Other decliners included South Korea’s Kospi, which fell 0.14 percent to 1,737.03, while in Australia the Sydney Ordinaries dropped 0.47 percent to 4,913.5 and the S&P/ASX200 was 0.53 percent lower to 4,881.5.

The Shanghai Composite was also down 0.53 percent, to 2,83.54, while the Hang Seng dropped 0.98 percent to 21,244.49 in Hong Kong.

The markets in Shanghai and Hong Kong were lower after the real estate sector declined on rumors that the Chinese government could tax third homes and other properties owned by individuals.

Markets seeing gains in the region included the Straits Times Index, which was up 0.26 percent to 2,988.49 while the Taiex added 0.33 percent to 8,004.89 in Taiwan and India’s Sensex gained 0.68 percent to 17,694.2.

New York markets were mixed in early afternoon trade as the Dow Jones Industrial Average had added 0.27 percent to 11,164.07 and the S&P 500 was up 0.22 percent to 1,211.38 but the Nasdaq Composite was 0.02 percent lower to 2,518.47.

Prices for crude oil and metals were higher in early afternoon trade in New York.

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