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Sunday 16th of January 2011
January 14, 2011    

Fresnillo leads miners, FTSE 100 lower

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by Elaine Frei
Fresnillo leads miners, FTSE 100 lower

European equities markets were mixed Friday, with some declines coming on concerns about new moves by China to rein in inflation, a new survey showing US consumer sentiment down, and on data which said that inflation in Germany grew at its fastest pace in over two years in December.

The FTSE 100 was down 0.36 percent to 6,002.07 in London, while the FTSE 250 dropped 0.21 percent to 11,742.4.

Miners were down on declines in metals prices as investors worried about another move by China to tighten money policy as the People’s Bank of China once again raised reserve requirements for banks.

The three biggest decliners on the 100 were from the mining sector, with Fresnillo (LSE: FRES) down 4.24 percent as it dropped most in the sector, while Anglo American (LSE: AAL) fell 3.23 percent and Antofagasta (LSE: ANTO) was 2.4 percent lower.

There were only three gainers among miners, led by an advance of 4.66 percent for Petropavlovsk (LSE: POG).

The worst decline on the 250 came from Avis Europe (LSE: AVE) as the car rental agent dropped 5.38 percent to lead retreats in the travel and leisure sector, while travel agent TUI Travel (LSE: TT) was the best of a few gainers there, adding 0.72 percent.

The energy sector was mostly lower, with declines led by Exillon Energy (LSE: EXI), which was down 4.88 percent, while the best performance in the sector came from oil rig construction and supply group Hunting (LSE: HTG) with an advance of 0.75 percent.

ARM Holdings (LSE: ARM) was the best performer on the 100 as the chipmaker was up 5.26 percent after a statement from Compal Electronics (TSEC: 2324) that more than 90 percent of the tablet computers it will make this year will contain chips made by ARM.

Precision instrumentation and controls supplier Spectris (LSE: SXS) was the biggest gainer on the 250, adding 6.98 percent, followed by a 5.81 percent advance for datacenter Telecity Group (LSE: TCY),

The FTSE Eurofirst 300 was down 0.09 percent to 1,156.34, but the Dax added 0.01 percent to 7,075.7, the IBEX was 0.14 percent higher to 10,385.1 and the CAC-40 gained 0.21 percent to 3,983.28.

Markets in the Asia-Pacific region were mixed Friday on concerns that inflation in the region will mean interest rate increases.

The Nikkei 225 added 0.86 percent to 10,499 in Tokyo, while the Topix index was up 0.79 percent to 930.31 and the Mothers market dropped 0.07 percent to 474.1.

Despite overall declines, Tokyo Electron (TYO: 8035) was up 3.2 percent on a positive quarterly report and an optimistic outlook from US-based chipmaker Intel (NAS: INTC), while Fast Retailing (TYO: 9983) gained 6 percent after Nomura Securities upped its recommendation on the company.

Consumer electronics giant Sony (TYO: 6758) was down 1.2 percent, while camera and copier maker Canon (TYO: 7751) was 1.3 percent lower.

Taiwan’s Taiex fell 0.03 percent to 8,972.51 and the Straits Times Index was down 0.3 percent to 3,245.96 in Singapore, while the Shanghai Composite was 1.29 percent lower to 2,791.34 and India’s Sensex dropped 1.68 percent to 18,860.4 and was 4.3 percent lower on the week.

China’s markets dropped on the possibility that interest rates and bank reserve requirements could go up there as soon as today and, indeed, the People’s Bank of China said late in the day that it will raise reserve requirements by half a percentage point beginning 20 January.

Meanwhile, with inflation at 8.4 percent in December, expectations are that the Reserve Bank of India could raise interest rates soon.

Markets in Australia, on the other hand, saw gains as the S&P/ASX200 was up 0.13 percent to 4,801.5 while the Sydney Ordinaries added 0.14 percent to 4,908.6.

Hong Kong’s Hang Seng was 0.18 percent higher, to 24,283.2, although Chinese property developers trading in Hong Kong were lower on concerns about interest rates and reserve requirements, with Agile Property Holdings Ltd (SEHK: 3383) down 0.2 percent while China Resources Land (SEHK: 1109) dropped 1.5 percent.

The Kospi added 0.89 percent to 2,108.17 in South Korea.

New York markets were higher in midday trade, with the Dow Jones Industrial Average adding 0.27 percent to 11,763.2 while at the same time the S&P 500 was up 0.39 percent to 1,288.73 and the Nasdaq Composte was 0.34 percent higher, to 2,744.61.

Crude oil prices were higher, with West Texas Intermediate crude up a slight 18 cents per barrel in New York, but Brent crude had added $1.08 per barrel in London trade.

Among metals, copper saw advances but gold and silver were lower, with gold down $27.40 to $1,359.60 per troy ounce.

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