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Friday 21st of January 2011
January 17, 2011    

Smiths Group up on bid for its medical unit

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by Elaine Frei
Smiths Group up on bid for its medical unit

Most markets in Europe were lower Monday as Eurozone finance ministers met to discuss possible changes to its fund meant to bail out faltering economies in the region.

The FTSE 100 was 0.27 percent lower to 5,985.7 in London, while the FTSE 250 was down 0.01 percent to 11,741.5.

Engineering groups were in focus on the 100 as Smiths Group (LSE: SMIN) led gains there, adding 7.72 percent on a bid for its medical unit, with automotive and aerospace engineering group GKN (LSE: GKN) second best at a gain of 3.56 percent, but Weir Group (LSE: WEIR), which specializes in pumps and valves, was down 2.82 percent.

Medical devices manufacturer Smith & Nephew (LSE: SN) added 3.5 percent on rumors that Johnson & Johnson (NYSE: JNJ) might submit a new bid.

Also on the 100, ARM Holdings (LSE: ARM), which makes chips for Apple’s (NAS: AAPL) iPhone, dropped 3.02 percent after Apple’s CEO, Steve Jobs, announced that he is taking a medical leave of absence.

In the pharmaceuticals sector, GlaxoSmithKline (LSE: GSK) was down 1.63 percent after notching legal costs totaling £2.2 billion in the fourth quarter due to product liability cases over its Avandia diabetes drug and in the course of dealing with a US investigation into its sales practices.

Miners were mostly lower, with declines led by a 3.55 percent drop for gold and silver miner Fresnillo (LSE: FRES), while the four gainers in the sector were led by Kenmare Resoruces (LSE: KMR), which added 1.36 percent.

Over on the 250, constituents of the energy sector provided both the best performance and the worst performance on the index as oil explorer Exillon Energy (SLE: EXI) added 4.56 percent, but Hunting (LSE: HTG), which provides supplies to the oil and gas industry, dropped 3.6 percent.

Also on the 250, builders’ merchant Travis Perkins (LSE: TPK) was 2.42 percent lower on a downgrade from “buy” to “sell” from Societe Generale.

The Pan-European Eurofirst 300 was up 0.04 percent to 1,156.59 and the Dax added 0.03 percent to 7,078.06, but the CAC-40 was 0.2 percent lower to 3,975.41 and the IBEX dropped 1.01 percent to 10,280.

Most markets in the Asia-Pacific region were lower an concerns that central banks across Asia could need to take steps to curb inflation.

The Topix index was down 0.17 percent in Tokyo to 928.73, but the Nikkei 225 was up 0.04 percent to 10,502.9 and the Mothers market added 0.49 percent to 476.43.

Businesses related to the semiconductors sector were higher after positive results last week from US-based chipmaker Intel (NAS: INTC).

Chip-testing equipment maker Advantest (TYO: 6857) was up 1.4 percent while Elpida Memory (TYO: 6665) added 2.5 percent after Deutsche Bank raised its recommendation on the company from “sell” to “hold” and increased its target share price.

Chipmaker Tokyo Electron (TYO: 8035) was up 3.4 percent, Dainippon Screen Manufacturing Co (TYO: 7735) was 3.8 percent higher after JPMorgan Chase raised its target share price for the chip-making equipment manufacturer, and silicon wafer manufacturer Sumco Corp (TYO: 3436) gained 5.3 percent.

Companies that do business with China were lower on concerns about its economy after the People’s Bank of China raised bank reserve requirements again last week.

Heavy machinery manufacturer Komatsu (TYO: 6301), which gets 20 percent of its sales in China, was down 1 percent while Hitachi Construction Machinery (TYO: 6305) fell 1.3 percent.

Shipper Nippon Yusen (TYO: 9101) was 1.1 percent lower and carmaker Suzuki Motor (TYO: 7269) dropped 1.7 percent.

Aside from the gains in Tokyo, India’s Sensex added 0.12 percent to 18.882.2.

The Straits Times Index was down 0.23 percent to 3,238.63 in Singapore, South Korea’s Kospi fell 0.39 percent to 2,099.85, the Hang Seng dropped 0.52 percent to 24,157 in Hong Kong and Taiwan’s Taiex was 0.53 percent lower to 8,925.09.

Australia’s markets were lower after inflation there remained above government targets for the fourth consecutive month, as the Sydney Ordinaries dropped 0.73 percent to 4,872.6 and the S&P/.ASX200 was down 0.8 percent to 4,763.1.

In China, the Shanghai Composite dropped 3.03 percent to 2,706.66 as banks and the real estate sector both tumbled on the raised reserve requirements for banks there.

US equities markets were closed in observance of Dr. Martin Luther King, Jr.’s birthday.

Crude oil prices were lower in electronic trading in New York, with floor trade closed for the US holiday, while Brent crude was lower on the ICE Futures Europe exchange in London.

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