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Thursday 17th of June 2010
June 15, 2010    

BSkyB gains on offer from News Corp

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by Elaine Frei
BSkyB gains on offer from News Corp

European equities markets were higher Tuesday despite new data showing that investor confidence dropped significantly in Germany, with the ZEW index down to 28.7 in June, from 45.8 in May.

The FTSE 100 added 0.3 percent to 5,217.82 in London, while the FTSE 250 gained 0.87 percent to 9,880.25 after the news that inflation slowed in May as consumer prices were up 3.4 percent over May 2009, better than April’s gain of 3.7 percent from the same month last year.

British Sky Broadcasting Group (LSE: BSY) led the media sector higher and topped all gainers in London as it added 16.57 percent on an offer from News Corp (NYSE: NWS) to buy the 61 percent of the broadcaster that it does not already own.

BSkyB turned down the offer of £7.8 billion ($11.5 billion) and named a higher price it would accept for the purchase of the remaining shares.

The energy sector was mixed on the session, with Melrose Resources (LSE: MRS) seeing the biggest gain as it added 6.92 percent, while BP (LSE: BP) led declines, falling another 3.78 percent after Fitch Ratings cut the troubled oil company’s credit rating to just two notches above junk status.

The utilities sector was also mixed as Centrica (LSE: CAN) added 3.54 percent but United Utilities Group (LSE: UU) dropped 0.97 percent.

The travel and leisure sector was mostly higher, led by British Airways (LSE: BAY) with a gain of 3.3 percent and closely followed by public transport operator Go-Ahead Group (LSE: GOG), which added 3.29 percent, while the worst performance of only three decliners in the sector came from Domino’s Pizza UK & IRL (LSE: DOM), which dropped 2.93 percent.

Satellite telecommunications group Inmarsat (LSE: ISAT) was the biggest decliner on the 100, dropping 5.05 percent after Bank of America Merrill Lynch reduced its recommendation from “neutral” to “underperform”.

Over on the 250, sporting goods retailer Sports Direct International (LSE: SPD) led gainers as it added 7.68 percent, while consumer credit company International Personal Finance (LSE: IPF) dropped 3.62 for the worst performance on the index.

The FTSE Eurofirst 300 was up 0.68 percent to 1,037.53 while the Dax added 0.82 percent to 6,175.05, the CAC-40 was 0.98 percent higher to 3,661.51 and the IBEX gained 1.65 percent to 9,742.

Most markets in the Asia-Pacific region were higher, but gains were generally modest.

The Nikkei 225 was 0.08 percent higher to 9,887.89 and the Topix index added 0.03 percent to 878.83 in Tokyo, but the Mothers market dropped 1.36 percent to 418.97.

Japanese brokers were higher after Credit Suisse upgraded them from “neutral” to “outperform”, with Daiwa (TYO: 8601) adding 1.8 percent while Nomura Holdings (TYO: 8604) was up 1.9 percent and Mizuho Securities (TYO: 8606) gained 4.1 percent.

All Nippon Airways (TYO: 9202) was 2.8 percent higher on a Morgan Stanley upgrade to “overweight”.

Carmakers were also higher as Toyota Motor (TYO: 7203) added 1.1 percent and Nissan Motor (TYO: 7201) gained 3.3 percent after Citigroup reaffirmed its “buy” rating.

Results were mixed in Australia, where the Sydney Ordinaries added 0.02 percent to 4,517.6 but the S&P/ASX200 dropped 0.01 percent to 4,505.

The Straits Times Index was up, but by just 0.14 point to 2,818.21 in Singapore, while Hong Kong’s Hang Seng added just 0.05 percent to 20,062.15, the Taiex was 0.9 percent higher to 7,454.06 in Taiwan and India’s Sensex gained 0.43 percent to 17,412.83.

The Kospi dropped 0.03 percent to 1,690.03 in South Korea, while China’s markets remained closed for a holiday.

New York markets were higher after demand for government debt in auctions in Ireland, Spain and Belgium was encouraging, while the Nasdaq was up on gains in the semiconductors sector on projections that demand for chips will increase.

The Dow Jones Industrial Average was 1.13 percent higher to 10,305.99 in midday trade, while the S&P 500 had added 1.28 percent to 1,103.61 and the Nasdaq Composite was 1.71 percent higher to 2,282.31.

The price of crude oil was higher, as both West Texas Intermediate crude and Brent crude traded near $77 per barrel at midday, while metals prices also saw gains.

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