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March 10, 2011    

Aquarius Platinum leads London miners lower

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by Elaine Frei
Aquarius Platinum leads London miners lower

European equities markets were lower Thursday after Moody’s Investors Service cut Spain’s credit rating to Aa2, saying that the nation’s banks will have to raise more than double the Spanish government’s estimate in order to meet new capital reserve requirements for banks.

Additionally, markets in the region were hurt by a decline in German exports in January and new data showing that China’s trade deficit is at $7.3 billion, its biggest in seven years, putting the state of the economic recovery into question, while continuing fighting in Libya also pushed markets lower.

The FTSE 100 was down 1.55 percent to 5,845.29 in London, while the FTSE 250 dropped 1.83 percent to 11,515.6 as the Bank of England held interest rates steady at 0.5 percent, where it has been for over two years now.

Miners were lower in London as prices for copper and some other metals declined, with Aquarius Platinum (LSE: AQP) leading declines in the sector and on the 250 as it fell 6.8 percent, followed by a 4.82 percent decline for Hochschild Mining (LSE: HOC), while gold and silver miner Fresnillo (LSE: FRSN) dropped 4.78 percent and platinum miner Lonmin (LSE: LMI) was 4.57 percent lower.

Pubs operators led gains in the travel and leisure sector, with Punch Taverns (LSE: PUB), which also led gains on the 250, adding 6.34 percent and J. D. Wetherspoon (LSE: JDW) was up 2.16 percent, while air carrier easyJet (LSE: EZJ) turned in the worst performance in the sector, dropping 3.23 percent.

Over on the 100, drug maker Shire plc (LSE: SHP) led gains as it added 1.64 percent, while chipmaker ARM Holdings (LSE: ARM) was down 8.97 percent on negative comment from JPMorgan Chase, which said that a reduction in demand for tablet computers could hurt the company.

Retailers were mostly lower, with declines led by DIY retailer Home Retail (LSE: HOME), which was down 5.88 percent after it reduced its full-year outlook on earnings, while the five gainers in the sector were led by funeral services provider Dignity (LSE: DTY) as it added 2.86 percent.

The FTSE Eurofirst 300 was down 1.15 percent to 1,131.54 while the CAC-40 fell 0.75 percent to 3,963.99, the Dax was 0.96 percent lower to 7,063.09 and the IBEX dropped 1.17 percent to 10,435.6.

Markets in the Asia-Pacific region were lower as the conflict in Libya continued and on bad news for the Japanese economy.

The Nikkei 225 was down 1.46 percent to 10,434.4 in Tokyo, while the Topix index fell 1.42 percent to 930.84 and the Mothers market dropped 2.59 percent to 499.42 after new data showing that Japan’s gross domestic product contracted by 1.3 percent in the fourth quarter of 2010 compared to the same quarter in the previous year, more of a drop than had been expected.

Construction companies that do business in the Middle East were lower on fears that conflicts in the region will increase, with construction company JGC Corp (TYO: 1963), which makes 34 percent of its sales in the Middle East, down 2.1 percent, while contractor Chiyoda (TYO: 6366), with nearly half of its salse coming from the Middle East, dropped 4.6 percent after Mitsubishi UFJ Morgan Stanley Securities cut its target share price.

In the semiconductors sector, Elpida memory (TYO: 6665) was 8 percent lower after US chipmaker Texas Instruments (NYSE: TXN) reduced its forecast range for the first quarter.

Among carmakers, Honda Motor (TYO: 7267) was down 0.7 percent while Toyota Motor (TYO: 7203) dropped 1.7 percent.

Property developers were lower on a report that office vacancy rates were up in Tokyo in February.

Elsewhere in the region, the Straits Times Index was down 0.56 percent to 3,075.44 in Singapore while India’s Sensex fell 0.77 percent to 18,328, the Hang Seng was 0.82 percent lower to 23,614.9 in Hong Kong, South Korea’s Kospi dropped 0.99 percent to 1,981.58 and the Taiex was down 1.22 percent to 8,642.9 in Taiwan.

In Australia, the S&P/ASX200 was 1.43 percent lower to 4,699.7 and the Sydney Ordinaries dropped 1.48 percent to 4,791.3, while the Shanghai Composite was down 1.5 percent to 2,957.14 in China.

New York equities markets were lower, hurt by data showing that China’s trade deficit is at its highest in seven years at the same that the US trade deficit was reported up 15.1 percent to $46.3 billion.

The downgrade of Spain’s credit rating, and the Labor Department’s latest jobs data, which showed that 26,000 new unemployment claims were filed in the US last week, more than double the expected increase, also hurt markets.

At shortly before 1 p.m. in New York, the Dow Jones Industrial Average was down 1.42 percent to 12.040.2, while the S&P 500 had dropped 1.43 percent to 1,301.14 and the Nasdaq Composite was 1.53 percent lower to 2,709.75.

The price of crude oil fell as economists said that high prices will hurt the economic recovery, with April contracts for West Texas Intermediate crude down $2.55 to $101.83 per barrel while at last report Brent crude had dropped $1.65 to $114.29 per barrel on the ICE Futures Europe exchange in London.

Metals prices were also lower as the US dollar strengthened, with gold down $23.30 to $1,406.30 per troy ounce while silver had dropped $1.22 to $34.83 per troy ounce in New York trade.

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