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August 27, 2010    

Cable & Wireless Worldwide leads telecoms higher in London

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by Elaine Frei
Cable & Wireless Worldwide leads telecoms higher in London

European equities markets made gains Friday after the US Commerce Department reported that the US economy grew by 1.6 percent in the second quarter, a little more than expected, and on comments from Federal Reserve Chairman Ben Bernanke.

Bernanke said in his opening remarks to a symposium of central bankers from around the world being held at Jackson Hole Wyoming, that the Fed will do everything possible to keep US economic recovery on track.

The FTSE 100 added 0.89 percent to 5,201.56 in London, while the FTSE 250 was 1.05 percent higher to 9.779.9.

Cable & Wireless Worldwide (LSE: CW) led gains on the 100, adding 5.67 percent as the telecommunications sector advanced, while Vodafone Group (LSE: VOD), with a gain of 2.78 percent and BT Group (LSE: BT.A) was up 2.76 percent as both also placed within the 100’s top five winners for the day.

The energy sector was mostly higher, led by a 6.71 percent gain for Hunting (LSE: HTG), which is a supplier to oil and gas explorers, but Tullow Oil (LSE: TLW) was the biggest decliner on the 100, dropping 3.81 percent after the government in Uganda canceled an exploration license it held because it expired and the company has not reapplied for the license.

The other two decliners in the energy sector were wind turbine gearbox manufacturer Hansen Transmissions International (LSE: HSN), which was 2.31 percent lower, while BP (LSE: BP) dropped 1.54 percent after a senior vice-president of the company told a US panel investigating the Deepwater Horizon explosion and oil leak that he doesn’t know who was in charge of decision-making for the rig before the disaster in April.

Most miners also saw gains, led by African Barrick Gold (LSE: ABG) with a gain of 4.29 percent, but tere were four decliners in the sector, led by a 1.02 percent drop for Talvivaara Mining Company, which fell 1.02 percent.

Over on the 250, engineering and manufacturing group Melrose (LSE: MRO) added 9.93 percent to lead gains in London, while directories publisher Yell Group (LSE: YELL) dropped 4.33 percent for the worst performance in London.

The FTSE Eurofirst 300 was up 0.64 percent to 1,026.78 while the Dax added 0.65 percent to 5,951.17, the CAC-40 was 0.93 percent higher to 3,507.44 and the IBEX gained 1.44 percent to 10,148.2.

Markets in the Asia-Pacific region were mixed, with more seeing gains than declines.

The Nikkei 225 added 0.95 percent to 8,991.06 in Tokyo but ended down 2 percent for the week, with the day’s gains coming on the possibility that the Japanese government will move to weaken the yen.

The Topix index was up 0.96 percent to 819.62 while the Mothers market gained 1.33 percent to 366.41.

Carmakers were higher on increased production, as Honda Motor (TYO: 7267) added 1.6 percent after it said its production was up 21.6 percent in July, while Nissan Motors (TYO: 7201) was 3.2 percent higher on production that added 17.9 percent in July.

Consumer electronics manufacturer Sony (TYO: 6758), which gets 70 percent of its sales from abroad, was up 2.7 percent while data storage media maker TDK (TYO: 6762) added 2.8 percent

Industrial robot manufacturer Fanuc (TYO: 6954) was 1.5 percent higher, while semiconductor testing equipment maker Advantest (TYO: 6857) gained 1.7 percent.

Drugmaker Kyowa Hakko Kirin Co (TYO: 4151) gained 4.5 percent after Mizuho Securities upgraded it from “neutral” to “outperform”, but brewer Kirin Holdings (TYO: 2503) dropped 1.1 percent after it said it will obtain the 49.9 percent of the shares it doesn’t already own in winemaker Merican Corp (TYO: 2536) via a stock swap.

The Shanghai Composite added 0.28 percent to 2,610.74, while in Australia the S&P/ASX200 was up 0.32 percent to 4,370.1 and the Sydney Ordinaries gained 0.33 percent to 4,404.1.

Taiwan’s Taiex was 0.43 percent higher to 7,722.91 and the Straits Times Index added 0.44 percent to 2,938.74.

Decliners in the region included the Kospi, which was 0.01 percent lower to 1,729.56 in South Korea, while the Hang Seng fell 0.07 percent to 20.597.35 in Hong Kong and India’s Sensex dropped 1.25 percent to 17,998.74.

New York markets were helped by the new GDP numbers and by Fed Chairman Bernanke’s comments as they improved investor confidence.

At just before 1 p.m. local time, the Dow Jones Industrial Average was 1.04 percent higher to 10,089.34 while the S&P 500 had added 1.01 percent to 1,057.75 and the Nasdaq Composite was up 0.91 percent to 2,137.94.

Crude oil prices and prices for metals were both higher in midday trade in New York.

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