BP leads declines on FTSE 100

| June 25, 2010
BP leads declines on FTSE 100

European equities markets were lower again Friday after revised figures showed that the US economy only grew by 2.7 percent in the first quarter, adding to concerns that economic recovery is not proceeding as well as hoped.

The FTSE 100 fell 1.05 percent to 5,046.47 in London, while the FTSE 250 was down 0.95 percent to 9,606.05.

BP (LSE: BP) led declines on the 100 as it dropped 6.32 percent for the worst performance in a mixed energy sector on concerns that an active Atlantic hurricane season could hurt efforts to clean up the mess from its Gulf of Mexico oil spill, and after an analyst at Nomura said that BP might have to raise cash to pay for damages caused by the spill.

Miners were also lower, with only three gainers in the sector led by Randgold Resources (LSE: RRS), which added 1.25 percent while losers were topped by Kazakhmys (LSE: KAZ) with a decline of 3.87 percent.

The biggest decline in London came for social housing maintenance specialist Connaught (LSE: CNT), which dropped 29.11 percent on the 250.

Household and personal care products manufacturer McBride (LSE: MCB) was down 18.45 percent on the session after having dropped nearly 22 percent yesterday on its prediction that materials costs will rise as much as 6 percent next year, but that it will not immediately be able to pass its costs along to consumers.

On the other hand, chemicals company Reckitt Benckiser (LSE: RB), which makes home, health and personal care products led gains on the 100 as it added 2.36 percent.

Private equity and investment management group SVG Capital (LSE: SVI) added 2.26 percent to lead gains on the 250.

Train and bus operator Stagecoach Group (LSE: SGC) added 2.05 percent on the session after Deutsche Bank issued an upgrade from “hold” to “buy” on the transport companies shares.

The FTSE Eurofirst 300 was up 0.62 percent to 1,014 while the IBEX fell 0.54 percent to 9,535, the Dax was 0.73 percent lower to 6,070.6 and the CAC-40 dropped 1 percent to 3,519.73.

Most markets in the Asia-Pacific region were lower again, although the Straits Times Index managed a gain of 0.14 percent to 2,851.64 in Singapore.

The Nikkei 225 was 1.92 percent lower to 9,737.48 in Tokyo, while the Topix index fell 1.42 percent to 867.3 and the Mothers market dropped 2.11 percent to 402.88.

The declines in Tokyo and elsewhere in the region came on concerns that negative forecasts from US companies as diverse as computer manufacturer Dell (NAS: DELL), home-furnishings retailer Bed, Bath & Beyond (NAS: BBBY) and sporting goods and sports apparel retailer Nike (NYSE: NKE) mean that the economic recovery is faltering in the United States.

Camera maker Canon (TYO: 7751), which gets 27 percent of its sales in the Western Hemisphere, fell 4.5 percent after Credit Suisse cut its recommendation from “neutral” to “underperform”, while Toyota Motor (TYO: 7203), with 28 percent of its sales coming from North America, dropped 1.9 percent.

Chip-related shares were lower after Mizuho Securities cut its ratings and target share price on several companies in the sector, with Tokyo Electron (TYO: 8035) down 5.6 percent while Elpida Memory (TYO: 6665) fell 8.4 percent and memory-chip maker Dainippon Screen Manufacturing (TYO: 7735) dropped 8.7 percent.

Banks were also lower in Tokyo as Mitsubishi UFJ (TYO: 8306) fell 0.5 percent, Sumitomo Mitsui Financial Group (TYO: 8316) was down 0.7 percent and Mizuho Financial Group (TYO: 8411) dropped 1.3 percent in anticipation of a decision on whether onr not it will offer up to 6 billion new shares for sale in an effort to raise up to ¥800 billion.

Elsewhere in the region the Hang Seng fell 0.21 percent to 20,690.79 in Hong Kong while the Shanghai Composite was down 0.54 percent to 2,552.82, South Korea’s Kospi was 0.58 percent lower to 1,729.84, and the Sensex dropped 0.88 percent to 17,574.53 in India.

Australia’s markets were down in the aftermath of a change in Prime Minister there, with the Sydney Ordinaries down 1.44 percent to 4,439.4 while the S&P/ASX200 fell 1.49 percent to 4,413.

In Taiwan, the Taiex dropped 1.52 percent to 7,474.71 after the central bank there unexpectedly raised interest rates for the first time since 2008, helping banks but hurting the real estate sector.

New York markets were mixed at just before 1 p.m. local time as the Dow Jones Industrial Average was down 0.27 percent to 10,125.56 but the S&P 500 had added 0.02 percent to 1,073.93 and the Nasdaq Composite as up 0.12 percent to 2,220.19.

Crude oil prices were higher, with West Texas Intermediate crude trading at nearly $79 per barrel in New York on concerns that a tropical storm currently in the Caribbean Sea could grow to hurricane strength and disrupt production in the Gulf of Mexico as the National Weather Service’s National Hurricane Center predicted that the storm has a 70 percent chance of forming into a tropical cyclone within the next 48 hours.

Meanwhile, metals prices were higher in New York trade, with gold trading at $1,256.90 per troy ounce at 1 p.m. local time.

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