Connaught drops 46 percent on warning

| August 6, 2010
Connaught drops 45 percent on warning

European equities markets ended the week on a down note Friday, with declines coming after a report from the US Labor Department showed that more US jobs were lost than expected in July, putting economic recovery in the US into question.

The report showed that the US economy lost 131,000 jobs in July, against an expected retreat of just 65,000 jobs, as many temporary census jobs came to an end.

The FTSE 100 was down 0.62 percent to 5,332.39 in London, while the FTSE 250 dropped 0.75 percent to 10,089.79.

By far the biggest decline in London came from facilities manager Connaught (LSE: CNT), which was down 46.55 percent after it predicted a “material loss” for the full year.

Lonmin (LSE: LMI) dropped 5.06 percent to lead declines on the 100 after the South African government told the miner it must stop selling non-platinum group metals such as copper, nickel and chrome, although the company said it will fight the order.

Gold miners fared better, with African Barrick Gold (LSE: ABG) leading gains in the sector as it added 3.66 percent while gold and silver miner Fresnillo (LSE: FRES) added 1.34 percent.

Brewers saw declines on higher wheat prices after Russia banned exports of grain and flour amid the worst drought there in half a century.

SABMiller (LSE: SAB) was down 2.41 percent while Diageo (LSE: DGE), maker of Guinness, dropped 2.27 percent.

Consumer goods manufacturer Unilever (LSE: ULVR) was down 2.82 percent on its warning about the impact of commodity costs and competition on its second half, leading both UBS and ING to cut their recommendations on the company’s shares.

The best performance in London came from IT services group Logica (LSE: LOG), which added 6.67 percent on the 250, while satellite telecommunications group Inmarsat (LSE: ISAT) added 4 percent to lead gains on the 100 after it said it saw a 56 percent gain in first-half pretax profit.

The FTSE Eurofirst 300 was down 1.14 percent to 1,056.35 while the Dax fell 1.17 percent to 6,259.63, the CAC-40 was 1.28 percent lower to 3,716.05 and the IBEX dropped 1.74 percent to 10,651.1.

Markets in the Asia-Pacific region were mixed to end the week.

The Nikkei 225 was 0.12 percent lower to 8,642.12 and the Mothers market dropped 0.65 percent to 378.49, but the Topix index added 0.48 percent to 861.17 in Tokyo as investors were hesitant ahead of US jobs numbers for July.

The yen was stronger, hurting exporters.

Shin-Etsu Chemical (TYO: 4063), which produces silicon for semiconductors, was down 1.3 percent, while Tokyo Electron (TYO: 8035) dropped 2 percent.

The real estate sector, however, was up again on lower vacancy rates in Tokyo, with Mitsubishi Estate (TYO: 8802) up 2.7 percent while Mitsui Fudosan (TYO: 8801) gained 3.9 percent.

Australia’s markets were also mixed but moved very little as the S&:P/ASX200 dropped 0.01 percent to 4,566.1 but the Sydney Ordinaries gained 0.03 percent to 4,586.3.

The Kospi dropped fractionally, dropping just 0.03 point to 1,783.83 in South Korea, while the Sensex was down 0.16 percent to 18.143.99 in India and Singapore’s Straits Times Index was 0.39 percent lower to 2,995.06.

Gainers in the region included Taiwan’s Taiex, which was up 0.33 percent to 7,963.3, while the Hang Seng added 0.59 percent to 21,678.8 in Hong Kong and the Shanghai Composite gained 1.44 percent to 2,658.39.

New York markets were down in early afternoon trade, hurt by the Labor Department’s report on jobs.

The Dow Jones Industrial Average had dropped 1.35 percent to 10,530 at just past 1 p.m. local time, while the S&P 500 was 1.44 percent lower to 1,109.59 and the Nasdaq Composite was down 1.31 percent to 2,263.06.

Crude oil prices were lower at 1 p.m. in New York, while metals prices were mixed as copper saw declines but gold traded higher at $1,207.20 per troy ounce and silver prices were also up.

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