Miners up, led by Fresnillo

| September 20, 2011 | 0 Comments
Miners up, led by Fresnillo

European equities markets were higher Tuesday after Greece characterized talks with the European Union and the International Monetary Fund as “productive” and “substantive”, but only after earlier declines after Standard & Poor’s cut Italy’s credit rating from A+ to A.

The FTSE 100 added 1.98 percent to 5,363.71 in London, while the FTSE 250 was up 0.78 percent to 10,308.6.

The mining sector saw more gains than declines, with gold and silver miner Fresnillo (LSE: FRES) added 4.07 percent, but there were also nine decliners, led by Kenmare Resources (LSE: KMR), which dropped 2.04 percent while Vedanta Resources retreated by 1.73 percent.

Hargreaves Lansdown was the best performer on the 100, as the financial services group added 8.5 percent, while Euromoney Institutional Investor (LSE: ERM) led gains on the 250 and in the media sector as the publisher of business and finance periodicals was up 8.07 percent, followed in the sector by a 4.68 percent gain for broadcaster ITV (LSE: ITV).

International Consolidated Airlines Group (LSE: IAG) had the worst day on the 100 and in the travel and leisure sector, dropping 2.59 percent after German rival Deutsche Lufthansa (FWB: LHA) cut its earnings forecast for the full year and said it will cut capacity this winter and was down 4.4 percent on the Dax as the only decliner on that index.

The declines for airlines followed earlier gains after the International Air Transport Association lifted its outlook for global airline profits by 73 percent for this year on demand in Europe and the Middle East.

Home credit specialist International Personal Finance (LSE: IPF) was down 5.29 percent to lead declines on the 250.

Homebuilders saw gains, led by Barratt Developments (LSE: BDEV), which was up 5.72 percent while Persimmon (LSE: PSN) gained 4.95 percent.

Banks were higher in London, led by a 2.44 percent for Lloyds Banking Group (LSE: LLOY), while Paris banks declined, led by BNP Paribas (Euronext: BNP), which was 6.51 percent lower and was the worst performer on the CAC-40.

The FTSE Eurofirst 300 was up 1.92 percent to 933.63 while the CAC-40 added 1.5 percent to 2,984.05, the IBEX was 1.7 percent higher to 8,362.2 and the Dax gained 2.88 percent to 5,571.68.

Markets in the Asia-Pacific region were mixed although the downgrade of Italy’s credit rating by Standard & Poor’s caused concerns that Italy’s economy could go the way of the Greek economy and that the region’s debt crisis will worsen and spread.

The Nikkei 225 was down 1.61 percent to 8,721.24 in Tokyo, while the Topix index dropped 1.7 percent to 755.04 and the Mothers market was 1.94 percent lower to 411.51 as exporters were hurt by a stronger yen versus the euro and banks reacted to the downgrade of Italy’s credit rating.

Toyota Motor (TYO: 7203) was down 1.8 percent, while consumer electronics manufacturer Sony (TYO: 6758), which makes a fifth of its sales in Europe, was 4.1 percent lower.

Among banks, Sumitomo Mitsubishi Financial Group (TYO: 8316) dropped 2.8 percent while Mitsubishi UFJ (TYO: 8306) was down 2.9 percent.

Tokyo Electric Power (TYO: 9501) was 8.1 percent lower on a media report that it will not raise power rates at the moment, after it had reportedly planned to raise prices by as much as 15 percent.

Shippers were also lower.

Australia’s markets were also lower as the Sydney Ordinaries dropped 0.94 percent to 4,124.8 and the S&P/ASX200 was down 1.01 percent to 4,040.2, but other markets saw gains, including a gain of 0.16 percent to 7,492.85 for Taiwan’s Taiex, while the Shanghai Composite added 0.41 percent to 2,447.75, the Hang Seng was 0.51 percent higher to 19,014.8 in Hong Kong, Singapore’s Straits Times Index gained 0.86 percent to 2,780.84, the Kospi was up 0.94 percent to 1,837.97 in South Korea, and India’s Sensex added 2.11 percent to 17,099.3.

New York equities markets were higher in midday trade in New York, with the Dow Jones Industrial Average up 1.02 percent to 11,517.7 while the S&P 500 had added 1.03 percent to 1,216.45 and the Nasdaq Composite was 0.74 percent higher to 2,632.23.

Crude oil prices were higher on hopes that the Greek debt crisis will ease after it paid some of its bills and was positive about talks with the European Union and the International Monetary Fund, with West Texas Intermediate crude up 64 cents to $86.34 per barrel at midday on the New York Mercantile Exchange, while Brent crude was last reported up $1.10 to $110.24 per barrel on the ICE Futures Europe exchange in London.

Precious metals prices were higher in midday trade in New York, with gold up $24.40 to $1,803.30 per troy ounce while silver added 78 cents to $39.94 per troy ounce, but copper was lower again, dropping 6 cents to $3.73 per pound in New York trade while three-month contracts for copper were down $55 to $8,309 per tonne on the London Metal Exchange.

The declines for copper came after the International Monetary Fund cut its global economic growth forecast for this year and next year.

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