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Monday 05th of July 2010
June 29, 2010    

No gainers on 100; Rio Tinto leads index lower

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by Elaine Frei
No gainers on 100; Rio Tinto leads index lower

European equities markets were substantially lower Tuesday on indications that economic expansion is slowing more than previously reported in China, on a drop in US consumer confidence, and on new concerns about the debt crisis in Europe.

The renewed European concerns stem from a move by the European Central Bank, which declined to renew its program to inject liquidity into the Eurozone banking system.

The ECB did its best to calm fears that halting the program would hurt the banking system, but officials admitted that some individual banks could have trouble due to the decision.

The FTSE 100 dropped 3.1 percent to 4,914.22 in London, while the FTSE 250 was down 2.9 percent to 9,365.29.

There were no gainers on the 100, while declines on the index were led by Rio Tinto (LSE: RIO), which fell 6.39 percent on the session, on concerns that slower growth in China will mean that demand for metals in the Asian nation will decline.

Support services group Connaught (LSE: CNT) remained in freefall as it led the 250 lower, dropping 20.96 percent after a decline of 37.21 percent yesterday and a fall of 29.11 percent last Friday on a profits warning and downgrades by brokers.

Other big losers on the 250 included materials technology provider Cookson Group (LSE: CKSN), which dropped 10.12 percent and floor coverings retailer Carpet right (LSE: CPR), which was down 9.86 percent for the worst performance among retailers.

There were just two gainers in the retail sector, where JD Sports Fashion (LSE: JD) added 1.48 percent and funeral services group Dignity (LSE: DTY) was up 1.09 percent, both on the 250.

All components in the energy sector were lower, led by wind turbine gearbox manufacturer Hansen Transmissions International (LSE: HSN) with a decline of 8.14 percent.

The FTSE Eurofirst 300 was 2.77 percent lower to 998.27 while the Dax fell 3.33 percent to 5,952.03, the CAC-40 was 4.01 percent lower to 3,432.99 and the IBEX dropped 5.45 percent to 9,160.4.

There were no gainers on either the Dax or the CAC-40.

Markets in the Asia-Pacific region were lower after the Conference Board reported that, due to an error in calculation, its earlier report that its index of leading Chinese indicators was up 1.7 percent in April was wrong and that the index was really up just 0.3 percent, causing concerns that the global economy is also growing more slowly than believed.

The Nikkei 225 was down 1.27 percent to 9,570.67 in Tokyo, while the Topix index feel 1 percent to 852.19 and the Mothers market dropped 0.53 percent to 383.39 on the news that industrial production and household spending both dropped in Japan in May, while unemployment was higher.

Oil company Inpex Corp (TYO: 1605) was down 3.8 percent on falling crude oil prices.

Exporters were hurt by a strengthening yen as Honda Motor (TYO: 7267) was 1.3 percent lower, Tokyo Electron (TYO: 8035) fell 1.6 percent in the semiconductors sector, and camera and copier maker Canon (TYO: 7751) dropped 2.7 percent.

Hitachi Construction Machinery (TYO: 6305), with China as its biggest market, dropped 2.2 percent.

The S&P/ASX200 was down 0.88 percent to 4,345.7 in Australia, while the Sydney Ordinaries dropped 0.89 percent to 4,370.6.

The Taiex fell 1.03 percent to 7,423.57 in Taiwan, India’s Sensex fell 1.35 percent to 17,534.09, the Straits Times Index was down 1.38 percent to 2,830.34 in Singapore, South Korea’s Kospi dropped 1.4 percent to 1,707.76, the Hang Seng fell 2.31 percent to 20,248.9 in Hong Kong, and the Shanghai Composite fell 4.27 percent to 2,427.05, a fourteen-month low.

New York markets were also lower in midday trade there, as the Dow Jones Industrial Average fell 2.24 percent to 9,911.27 while at the same time the S&P 500 had dropped 2.57 percent to 1,046.99 and the Nasdaq Composite was 3.07 percent lower to 2,152.58.

The declines came after a report from the Conference Board showed its US consumer confidence index down from 62.7 in May to 52.9 in June on concerns about jobs and after disappointing data from the US housing market, and on worries about the European debt crisis after the ECB’s move to halt its program to boost liquidity in the banking sector there.

The price of crude oil was lower, and while silver and copper prices fell, gold was trading $5.40 higher at midday.

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