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11th of August 2011
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Provident Financial leads gains on FTSE 100

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by Elaine Frei
Provident Financial leads gains on FTSE 100

Equities markets were lower in Europe Wednesday as investors continued to worry about the ongoing controversy in the United States regarding the debt ceiling there, while a drop in US durable goods orders in June over may also caused concerns.

The FTSE 100 was down 1.23 percent to 5,856.58 in London, while the FTSE 250 was 1.18 percent lower to 11,650.3 as the banking, chemicals and energy sectors each saw all their constituents decline and most other sectors were largely lower.

Subprime lender Provident Financial (LSE: PFG) added 8.36 percent to lead gains on the 250 and in the largely lower financial services sector after it reported fewer bad loans and profits in the first half that exceeded expectations, while software group Autonomy Corporation (LSE: AU) added 3.96 percent as the best performer on the 100 after it said its net earnings were up by 5 percent in the second quarter.

Gas and electricity utility Scottish & Southern Energy (LSE: SSE) was the worst performer on the 100 as it dropped 5.28 percent, while engineering group Renishaw (LSE: RSW) was down 10.39 percent as the biggest decliner on the 250.

The banking sector was lower, led by a 4.28 percent drop by Lloyds Banking Group (LSE: LLOY), after Goldman Sachs downgraded the sector from “overweight” to “neutral”, while banks were also hurt by disappointing results from Spain’s Banco Santander (BMAD: SAN), with Barclays Bank (LSE: BARC) down 3.39 percent while Royal Bank of Scotland Group (LSE: RBS) was down 3.21 percent.

There was only one gainer in the insurance sector, while the food and beverage sector, homebuilders and the telecommunications sector only saw two winners each and the media and real estate sectors each saw just three stocks advance.

The FTSE Eurofirst 300 was down 1.1 percent to 1,088.84 while the Dax fell 1.32 percent to 7,252.68, the CAC-40 was 1.42 percent lower to 3,734.07 and the IBEX dropped 1.93 percent to 9,643.3.

Markets in Asia and the Pacific region were mixed Wednesday, with many seeing declines on growing concerns that US lawmakers will not meet a deadline to raise the debt ceiling, which could mean a downgrade of its credit rating and could also hurt the global economy.

The Nikkei 225 was down 0.5 percent to 10,047.2 in Tokyo, while the Topix index dropped 0.82 percent to 859.11 but the Mothers market was up 0.05 percent to 483.57 as Tokyo Electric Power (TYO: 9501) dropped 16 percent after draft legislation before parliament there asked shareholders to “cooperate” in giving compensation to victims of the nuclear meltdown at Fukushima Dai-Ichi power plant, which according to some interpretations could mean that investors could lose capital and banks could have to waive some loans to the power company.

Banks were lower on the concerns about the US debt ceiling controversy, with Mitsubishi UFJ (TYO: 8306) down 0.7 percent and Sumitomo Mitsui Financial Group (TYO: 8316) dropping 1.2 percent, while many exporters were hurt by a stronger yen.

Carmakers Toyota Motor (TYO: 7203) and Nissan Motors (TYO: 7201) were 1.2 percent lower and 1.9 percent lower respectively, while consumer electronics manufacturer Sony (TYO: 6758) dropped 1.4 percent but industrial robot maker Fanuc (TYO: 6954) added 1.2 percent on a raised profits forecast.

The Hang Seng was down 0.13 percent to 22,541.7 in Hong Kong, Singapore’s Straits Times Index fell 0.22 percent to 3,193.54, the Sensex was 0.46 percent lower to 18,432.2 in India, and Australia’s markets were lower as the Sydney Ordinaries dropped 0.73 percent to 4,612.6 and the S&P/ASX200 was down 0.78 percent to 4,537.4.

Taiwan’s Taiex and South Korea’s Kospi each added 0.26 percent, to 8,817.49 and 2,174.31 respectively, while the Shanghai Composite was up 0.76 percent to 2,723.49.

New York equities markets were lower in midday trade as the Dow Jones Industrial Average fell 0.8 percent to 12,401.4, the S&P 500 had dropped 1.23 percent to 1,315.61 and the Nasdaq Composite was 1.79 percent lower to 2,789.03.

Crude oil prices were lower at midday in New York, with West Texas Intermediate crude down $1.54 to $98.05 per barrel after the US Energy Information Administrations reported that stockpiles were higher last week against an expected decline, while Brent crude was last reported down 15 cents to $118.13 per barrel.

Metals prices were also lower in midday trade in New York.

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News posted: July 27, 2011

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