Charter International drops 25 percent on profits estimate

| June 20, 2011
Charter International drops 25 percent on profits estimate

Equities markets in Europe were lower Monday after governments in the region could not agree on the release of a loan payment in July to keep Greece out of default as they continued to put pressure on Greek Prime Minister George Papandreou to make more cuts to the nation’s budget and to sell more of its assets at a time when he faces protesters opposed to austerity measures and a confidence vote that could put him out of a job.

The FTSE 100 was down 0.38 percent to 5,693.39 in London, while the FTSE 250 dropped 1.06 percent to 11,537.8.

Engineering group Charter International (LSE: CHTR), which specializes in welding equipment, dropped 25 percent to lead declines on the 250 after it said full-year profits will fall short of estimates this year, while banks were lower as Royal Bank of Scotland Group (LSE: RBS) was down 4.42 percent to lead declines on the 100 after it sold more than 354 million shares in order to pay bonuses to employees.

Besides banks, the energy sector and utilities were both lower except for one gainer in each sector, while most other sectors mostly saw losses, and the chemicals sector was down but the telecommunications sector bucked the losing trend and was up except for a drop of 0.29 percent for Cable & Wireless Communications (LSE: CWC).

Telecom Plus (LSE: TEP), which supports landline and telephone service as well as other utilities, was the best performer on the 250 as it added 6.38 percent, while satellite telecommunications specialist Inmarsat (LSE: ISAT) was up 4.61 percent to lead gainers on the 100.

Clothing retailer SuperGroup (LSE: SGP) dropped 4.11 percent on its report that sales in its fiscal first quarter did not grow much more than they had in the previous two quarters.

The FTSE Eurofirst 300 was down 0.48 percent to 1,081.51 while the Dax fell 0.19 percent to 7,150.21 and saw only one stock advance, the CAC-40 was 0.63 percent lower to 3,799.66 with just six gainers on the session, and the IBEX dropped 0.96 percent to 10,038.1.

Most markets in the Asia-Pacific region were lower on continuing concerns about European debt, particularly the situation regarding Greece, but Tokyo’ s markets were mostly higher on the possibility that the Japanese government could allow nuclear reactors there to restart.

The Nikkei 225 was up 0.03 percent to 9,354.32 in Tokyo, while the Topix index added 0.19 percent to 806.83 but the Mothers market dropped 1.87 percent to 442.97.

Utilities were higher on the news that they could once again be allowed to produce nuclear power, with Chubu Electric Power (TYO: 9502) was up 7.87 percent while Kansai Electric Power (TYO: 9503) added 7.74 percent and Tokyo Electric Power (TYO: 9501) was 3.97 percent higher, but oil-related shares were down on lower prices for crude oil, with explorer and producer Inpex (TYO: 1605) down 1.6 percent.

Optics group Olympus (TYO; 7733) added 4.3 percent on a positive income forecast.

Also seeing gains in the region was Singapore’s Straits Times Index, which added 0.28 percent to 3,013.6, but other markets were lower as the Hang Seng was down 0.44 percent to 21,599.5 after property developers declined on the possibility that the government there could take measures to slow property price gains, with some in the industry saying that prices could drop by 10 percent to 15 percent.

South Korea’s Kospi fell 0.6 percent to 2,019.65, Australia’s markets were lower with the S&P/ASX200 down 0.74 percent to 4,451.7 while the Sydney Ordinaries dropped 0.85 percent to 4,512.5, the Shanghai Composite was 0.82 percent lower to 2,621.25, Taiwan’s Taiex was down 1.22 percent to 8,530.68 and the Sensex dropped 0.28 percent to 17,506.6 in India on reports that the government there could tax capital gains on investments made through the island nation of Mauritius.

New York equities markets were higher on some optimism from analysts that the stalemate over the July bailout payment to Greece will sort itself out, with the Dow Jones Industrial Average up 0.61 percent to 12,078 at 1 p.m. local time, while the S&P 500 added 0.52 percent to 1,278.06 and the Nasdaq Composite was 0.66 percent higher to 2,633.82.

Crude oil prices were lower in midday trade, with July contracts for West Texas Intermediate crude down 34 cents to $92.67 per barrel, while recent reports had Brent crude dropping $1.41 to $111.80 per barrel on the ICE Futures Europe exchange in London.

Among metals, prices for copper were down 3 cents per pound in New York trade, but gold and silver prices were up slightly.

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