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October 15, 2010    

Old Mutual leads insurers lower in London

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by Elaine Frei
Old Mutual leads insurers lower in London

European equities markets were mixed Friday as London markets declined but markets in Frankfurt, Paris and Madrid managed gains.

London markets were lower as a new consumer sentiment survey from Reuters and the University of Michigan showed that its consumer confidence index in the United States is down to 67.9 this month from 68.2 in October, against an expected rise to 68.9, with the negative data more impressive than comments from Federal Reserve Chairman Ben Bernanke which indicated that the Fed is getting ready to make more moves to help the US economy.

The FTSE 100 was down 0.42 percent to 5,703.37 while the FTSE 250 dropped 0.45 percent to 10,833.51.

Insurers were the three biggest decliners on the 100, with the worst performance coming from Old Mutual (LSE: OML), which was 4.75 percent lower after HSBC Holdings (LSE: HSBA) said it won’t buy Old Mutual’s stake in South African bank Nedbank Group Ltd (JSE: NED) after all.

Following Old Mutual lower were Standard Life (LSE: SL) with a decline of 3.24 percent and RSA Insurance Group (LSE: RSA), which dropped 3.23 percent, while Phoenix Group Holdings (LSE: PHNX) was the best performer among insurers as it added 1.25 percent.

The best perofrmance on the 100 came from the telecommunications sector, where BT Group (LSE: BT.A) added 2.93 percent after it agreed on a contract with the UK government, but the sector was mixed as TalkTalk Telecom Group (LSE: TALK) dropped 4.36 percent and Cable & Wireless Worldwide (LSE: CW) was down 3.34 percent.

Both the best and worst performers on the 250 came from the energy sector, where wind turbine gearbox manufacturer Hansen Transmissions International (LSE: HSN) added 8.08 percent but Salamander Energy (LSE: SMDR) was down 14.78 percent for the worst performance in London.

Banks were mixed as Royal Bank of Scotland Group (LSE: RBS) added 2.43 percent and Barclays Bank (LSE: BARC) gained 1.8 percent, but HSBC Holdings (LSE: HSBA) dropped 1.36 percent.

Most miners were lower, with Aquarius Platinum Ltd (LSE: AQP) turning in the worst performance in the sector as it fell 3.86 percent, but African Barrick Gold (LSE: ABG) led a few gainers higher as it added 1.06 percent.

The FTSE Eurofirst 300 was down 0.04 percent to 1,084.22, but the IBEX added 0.17 percent to 10,868.2, the CAC-40 was 0.21 percent higher to 3,827.37 and the Dax gained 0.57 percent to 6,492.3.

Markets in the Asia-Pacific region were mixed, with more down that up, after Thursday’s report from the US Labor Department that new jobless claims were up by 13,000 last week spurred new worries about how the economic recovery is proceeding in the United States, while banks were lower on a separate report that US home foreclosures were at a new high in September.

The Nikkei 225 was 0.87 percent lower to 9,500.25 in Tokyo, while the Topix index fell 1.26 percent to 826.38 and the Mothers market dropped 2.01 percent to 346.08.

Banks there were also hurt by a media report that the three largest Japanese banks will sell shares worth up to ¥2 trillion over the next three years as they prepare to conform to new rules requiring banks to hold more cash in reserve.

Mitsubishi UFJ Financial Group (TYO: 8306) was down 2.8 percent while Mizuho Financial Group (TYO: 8411) dropped 4.9 percent.

Exporters were lower after the yen was at its strongest in fifteen years versus the US dollar, hurting prospects for higher profits from goods sold overseas.

In the electronics sector, Sony (TYO: 6758) was down 1 percent and Panasonic (TYO: 6752) fell 1.2 percent, while camera and copier maker Canon (TYO: 7751) was 1.3 percent lower.

Among carmakers, Toyota Motor (TYO: 7203) was down 1.2 percent and Honda Motor (TYO: 7267) dropped 1.4 percent.

Other decliners in the region included Taiwan’s Taiex, which was 0.12 percent lower to 8,205.3 while in Australia the Sydney Ordinaries dropped 0.16 percent to 4,758.2 and the S&P/ASX200 was down 0.21 percent to 4,689.

The Hang Seng fell 0.4 percent to 23,757.63 in Hong Kong, and India’s Sensex dropped 1.82 percent to 20,125.05.

Markets seeing gains included the Kospi, which was up 0.13 percent to 1,902.29 in South Korea, while the Straits Times Index added 0.29 percent to 3,204.27 in Singapore and the Shanghai Composite gained 3.18 percent to 2,971.16 in China.

New York markets were mixed in midday trade as the Dow Jones Industrial Average was 0.37 percent lower to 11,053.93 but the S&P 500 added 0.05 percent to 1,174.44 and the Nasdaq Composite was 0.9 percent higher to 2,457.35.

The Nasdaq was helped by gains for Google (NAS: GOOG) a day after the internet search engine reported that net revenues were up by 25 percent in the third quarter.

Crude oil was down more than $1 per barrel at midday in New York, while copper had added a cent and a half per pound but precious metals were lower, with gold trading $6 below Thursday’s close.

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