Aquarius Platinum leads miners lower on sector downgrade
Equities markets in Europe were lower Thursday on investor concerns that attempts to solve Europe’s debt problems are uncoordinated after Germany moved on its own to ban naked short-sales of some banking and insurance shares and stopped naked credit-default swaps of European government bonds apparently without consulting other European Union member nations or the European Central Bank.
A report from the US Labor Department showing that first-time jobless claims were up last week also hurt markets.
The FTSE 100 was down 1.65 percent to 5,073.13 in London, while the FTSE 250 dropped 2.45 percent to 9,433.59.
Miners were lower on declines in metals prices and after Bank of America Merrill Lynch cut its recommendation on the European mining sector from “overweight” to “neutral”, with the biggest decline coming from Aquarius Platinum (LSE: AQP), which dropped 8.61 percent to lead declines on the 250.
In addition to the sector-wide downgrade, Rio Tinto (LSE: RIO) fell 5.78 percent after Bank of America Merrill Lynch reduced its recommendation on the group from “buy” to “neutral”, while it cut its rating on copper miner Kazakhmys (LSE: KAZ), which dropped 4.31 percent, from “buy” to “underperform”.
The energy sector was also mostly lower, with Hansen Transmissions International (LSE: HSN) leading declines as it dropped 7.42 percent, but BP (LSE: BP) led gains on the 100 as it added 1.01 percent after it said it could attempt to cap its leaking Gulf of Mexico well as early as Sunday and JKX Oil & Gas (LSE: JKX) led gains in the sector as it gained 1.3 percent.
Most in the utilities sector were lower, led by a drop of 7.02 percent from National Grid (LSE: NG), with declines coming on its announcement that it will raise £3.2 billion by issuing new shares and despite its report that pretax profits for the full year were at £2.2 billion.
Also in the utilities sector, Scottish & Southern Energy (LSE: SSE) dropped 3.08 percent after a downgrade to “neutral” from Exane BNP Paribas, while the only gainer in the sector was Northumbrian Water Group (LSE: NWG), which added 1.02 percent on the session.
Directories publisher Yell Group (LSE: YELL) was the best performer on the day on the 250 and in London as it added 9.94 percent.
The FTSE Eurofirst 300 was down 2.24 percent to 974.04 while the IBEX fell 1.13 percent to 9,270.5, the Dax was 2.02 percent lower to 5,867.88 and the CAC-40 dropped 2.25 percent to 3,432.52.
There was only one gainer on the CAC-40 and just two on the Dax.
Most Asia-Pacific markets dropped as concerns continued that the European debt crisis will hurt economic growth not only in Europe but globally, while Japan’s Finance Minister cautioned that Japan remains in deflation.
The Nikkei 225 was down 1.54 percent to 10,030.31 in Tokyo, while the Topix index fell 1.37 percent to 898.15 and the Mothers market dropped 1.22 percent to 408.66.
Toyota Motor (TYO: 7203) was 2.6 percent lower on another recall, this time of Passo subcompacts within Japan, due to a problem with that model’s engine.
Camera and copier maker Canon (TYO: 7751) was down 2.7 percent while game maker Nintendo (TYO: 7974) dropped 3.2 percent.
The Hang Seng was down 0.17 percent to 9,545.83, while the Straits Times Index fell 0.76 percent to 2,753.51 and the Shanghai Composite dropped 1.23 percent to 2,555.94.
Property companies were down again in China as Poly Real Estate Group (SSE: 600048) fell 1.5 percent in Shanghai, while China Vanke (SZSE: 000002) was down 2.2 percent on the Shenzhen exchange.
The S&P/ASX200 was 1.61 percent lower to 4,342.4 in Australia, while the Sydney Ordinaries dropped 1.63 percent to 4,342.4.
Taiwan’s Taiex was down 1.78 percent to 7,424.43, while the Kospi was 1.83 percent lower to 1,600.18 in South Korea.
On the other hand, India’s Sensex added 0.68 percent to 16,519.68.
Wall Street was down after the Labor Department reported that new filings for unemployment benefits were up by 25,000 last wseek to 471,000, their biggest one-week gain in three months, in a week where new claims were expected to decline.
At just pat 1 p.m. in New York, the Dow Jones Industrial Average was down 2.99 percent to 10,132.55 while the S&P 500 had dropped 3.36 percent to 1,077.55 and the Nasdaq Composite was 3.8 percent lower to 2,211.11.
Crude oil prices were substantially lower at 1 p.m. in New York as West Texas Intermediate crude had fallen by more than $5 per barrel, while at last report Brent crude was down more than $3 per barrel.
Metals prices were also lower in early afternoon trade in New York.