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Wednesday 16th of June 2010
June 9, 2010    

Hochschild Mining leads sector as metals prices rise

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by Elaine Frei
Hochschild Mining leads sector as metals prices rise

European equities markets were higher Wednesday on media reports that China’s exports were up 50 percent in May over the same month last year, raising hopes that economic recovery is on track, and on gains for miners after metals prices were up.

The FTSE 100 added 1.15 percent to 5,085.86 in London, while the FTSE 250 gained 1.4 percent to 9,487.18.

Most miners were higher on gains for metals prices, led by Hochschild Mining (LSE: HOC), which added 5.33 percent while gold miner Fresnillo (LSE: FRES) was the best performer on the 100 with a gain of 4.63 percent.

There were two decliners in the sector as Talvivaara Mining Company (LSE: TALV) fell 0.48 percent and Randgold Resources (LSE: RRS) dropped 0.74 percent.

BP (LSE: BP) led declines on the 100, falling 4.24 percent as some analysts said that the oil company has lost credibility over the leak at one of its wells in the Gulf of Mexico, while there were four other decliners in the sector, including Royal Dutch Shell (LSE: RDSA, RDSB), with ‘A’ shares falling 0.53 percent while ‘B’ shares dropped 0.32 percent.

Petrofac Ltd (LSE: PFC) turned in the best performance in the energy sector, adding 4.17 percent.

Software group Misys (LSE: MSY) led gains on the 250 and in all of London as it added 11.41 percent, while Cable & Wireless Communications (LSE: CWC), which is trading ex-dividend, dropped 6.7 percent for the worst performance in London.

The retail sector was up on the session, led by department store operator Debenhams (LSE: DEB) with a gain of 5.72 percent, while floor coverings retailer Carpet right (LSE: CPR) gained 4.87 percent.

The FTSE Eurofirst 300 was up 1.78 percent to 996.84 while the CAC-40 added 1.96 percent to 3,446.77, the Dax was 1.98 percent higher to 5,984.75 and the IBEX gained 2.29 percent to 8,868.7, with no losers at all on either the Dax or the CAC-40.

The leaders of France and Germany called on the European Union to ban some naked short sales of stocks and bonds, as well as naked credit-default swaps on government bonds.

Markets in the Asia-Pacific region were mixed on continued worries about Europe’s debt crisis after Fitch Ratings said Tuesday that if the UK does not speed up its budget cuts, its credit rating could be at risk.

The Nikkei 225 was down 1.04 percent to 9,439.13 in Tokyo while the Topix index fell 0.93 percent to 850.37 and the Mothers market dropped 1.4 percent to 410.65 as exporters were hurt by a stronger yen, and even though new data showed that machinery orders in Japan were up by more than anticipated in April.

Camera maker Canon (TYO: 7751) was 1.8 percent lower while video games maker Nintendo (TYO: 7974) dropped 4.6 percent.

Chipmaker Elpida Memory (TYO: 6665) was down 3.3 percent on a decline in chip prices.

Among carmakers, Honda Motor (TYO: 7267) was down 2.8 percent on strikes at some of its Chinese suppliers resulted in shutdowns at two plants, while Nissan Motor (TYO: 7201) dropped 3.6 percent.

The Straits Times Index was down 0.03 percent to 2,745.8 in Singapore, while the Kospi fell 0.26 percent to 1,647.22 in South Korea and Taiwan’s Taiex was 1.12 percent lower to 7,071.67.

In Australia, the Sydney Ordinaries added 0.03 percent to 4,402.6 and the S&P/ASX200 was up 0.09 percent to 4,385.3.

Gold miners there saw gains on Tuesday’s record highs for gold, with Newcrest Mining (ASX: NCM) up 0.9 percent, while St. Barbara Ltd (ASX: SBM) added 4.4 percent and Avoca Resources (ASX: AVO) gained 8.3 percent.

Elsewhere, India’s Sensex was up 0.25 percent to 16,657.89, the Hang Seng added 0.69 percent to 19,621.24 in Hong Kong, and the Shanghai Composite gained 2.78 percent to 2,583.87.

Wall Street was up in midday trade, buoyed by comments from Federal Reserve Chairman Ben Bernanke in testimony before the House Budget Committee that the European debt crisis will not likely hurt the US economy too much.

The Dow Jones Industrial Average was up 0.96 percent to 10,035.28 at just past 12:30 p.m. in New York, while at the same time the S&P 500 had added 1.16 percent to 1,074.28 and the Nasdaq Composite was 1.29 percent higher to 2,198.63.

Crude oil prices were up at midday, trading above $74 per barrel.

The price of copper was up in New York, but gold and silver were lower in midday trade.

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