Smith & Nephew gains 9 percent on bid rumors

| December 8, 2010
Smith & Nephew gains 9 percent on bid rumors

European equities markets were mixed Wednesday as investors tried to balance recent economic reports that were mostly positive against concerns that the debt problems of some nations in the region might get worse or spread.

The FTSE 100 was down 0.24 percent to 5,794.53 in London, while the FTSE 250 dropped 0.71 percent to 11,218.7.

Medical device manufacturer Smith & Nephew (LSE: SN) was up 9.06 percent and was the biggest gainer on the 100 after an unattributed media report that a group of US private equities firms might be ready to make a bid, while Goldman Sachs repeated its “buy” recommendation on the company.

Polymer producer Victrex (LSE: VCT), meanwhile, led gainers on the 250 as it added 6.97 percent.

Insurer Lancashire Holdings (LSE: LRE) was the worst performer on the 250, falling 13.06 percent, while over on the 100 Capital Shopping Centres Group (LSE: CSCG) turned in the worst performance on the 100, dropping 5.34 percent after US- based Simon Properties Group (NYSE: SPG) said it would take back its bid on the property manager and developer if Capital Shopping continues to refuse to disclose the due-diligence information requested by Simon Property as part of the bids process.

Most of the real estate sector was lower, led by the decline for Capital Shopping Centres Group, while the four gainers in the sector were led by a 3.11 percent gain for St Modwen Properties (LSE: SMP).

Four of the top five decliners on the 100 were from the mining sector, which was all lower aside from an 0.68 percent gain for Vedanta Resources (LSE: VED).

Gold and silver miner Fresnillo (LSE: FRES) was down most among miners as it dropped 4.86 percent, while Randgold Resources (LSE: RRS) fell 3.47 percent, Rio Tinto (LSE: RIO) was down 3 percent and Anglo American (LSE: AAL) was 2.99 percent lower.

The energy sector was mixed, with wind turbine gearbox manufacturer Hansen Transmissions International (LSE: HSN) down 1.81 percent for the biggest gain in the sector, while EnQuest (LSE: ENQ) was down 4.37 percent for the worst performance among energy-related companies.

The FTSE Eurofirst 300 was up 0.36 percent to 1,119.73 while the CAC-40 added 0.56 percent to 3,831.98 and the IBEX gained 1.55 percent to 10,078.4, but the Dax fell 0.37 percent to 6,975.87.

Most markets in the Asia-Pacific region saw declines on concerns that China will raise interest rates again soon.

Tokyo’s markets were mixed as the Nikkei 225 added 0.9 percent to 10,232.3 and the Topix index was up 0.94 percent to 887.39, but the Mothers market dropped 0.13 percent to 398.98 as the yen weakened in relation to the US dollar, helping exporters, after US President Barack Obama agreed to a two-year extension of tax cuts which investors hoped would help strengthen the economy.

Fuji Heavy Industries Ltd (TYO: 7270), which makes Subaru cars, was up 1.6 percent while Honda Motor (TYO: 7267) added 2 percent.

In the electronics sector Kyocera Corp (TYO: 6971), which makes a diverse range of electronic products, was 1.4 percent higher, while consumer electronics manufacturer Sony gained 1.9 percent.

Traders saw gains after copper hit a new record high price in London on Tuesday.

Central Japan Railway (TYO: 9022) was up 1.2 percent and East Japan Railway (TYO: 9020) added 2.8 percent after Goldman Sachs reiterated its “buy” ratings on both railroad operators.

Most other markets in the region were lower on continuing concerns about further tightening of monetary policy in china, although the Straits Times Index was up 0.34 percent to 3,202.8 in Singapore.

Taiwan’s Taiex was down 0.01 percent to 8,703.79 and the Kospi was 0.35 percent lower to 1,955.72 in South Korea, while in Australia the Sydney Ordinaries dropped 0.5 percent to 4,791.7 and the S&P/ASX200 fell 0.57 percent to 4,699.9.

The Shanghai Composite was 0.95 percent lower on the possibility that the government there might raise interest rates again over the weekend, sending banks and the real estate sector lower.

Real estate firms were also hurt by a media report that Shanghai might be one of the first cities to participated in a trial program imposing property taxes, beginning early next year.

Gemdale (SSE: 600383) was down 1.8 percent in Shanghai, while Shenzhen-listed China Vanke (SZSE: 000002) dropped 2 percent.

India’s Sensex was 1.19 percent lower to 19,696.5 while the Hang Seng was down 1.43 percent to 23,092.5 in Hong Kong.

New York markets were mixed in early afternoon trade as the S&P 500 added 0.03 percent to 1,224.11 and the Nasdaq Composite had added 0.16 percent to 2,602.59, but at the same time the Dow Jones Industrial Average was down 0.07 percent to 11,351.4.

Crude oil prices were lower after the US Energy Information Administration said that while crude oil stockpiles in the US were down 3.8 million barrels last week, gasoline and distillates inventories were up much more than had been expected.

Copper prices were up again, but precious metals prices fell as gold had dropped $27 per troy ounce by early afternoon in New York.

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