Rolls-Royce group up on sale
European equities markets were lower Thursday after a warning from the European Central Bank, which said that making financial institutions that hold Greek bonds absorb more losses could imperil financial stability in the Eurozone, while markets were also hurt by data that exports from China were up 17.1 percent in September from last year, less of a gain than expected.
The FTSE 100 was down 0.71 percent to 5,403.38 in London, while the FTSE 250 dropped 0.87 percent to 10,230.5, despite top gains on both indices that were above 9 percent.
Rolls-Royce Group (LSE: RR) led gains on the 100, adding 9,9 percent after it said it will sell its 32.5 percent stake in jet-engine joint venture International Aero Engines to aerospace manufacturer Pratt & Whitney, which already owns a 32.5 percent stake in the venture, while Premier Foods (LSE: PFD) was up 9.94 percent as the food manufacturer recovered some of its recent declines.
Banks were lower, with Barclays (LSE: BARC) leading declines in the sector and on the 100 as it dropped 7.38 percent, while Royal Bank of Scotland Group (LSE: RBS) was down 6.39 percent and Lloyds Banking Group (LSE: LLOY) was 5.48 percent lower after Fitch Ratings cut its ratings on Lloyds and RBS from A to AA-minus.
Engineering group Renishaw (LSE: RSW) was the worst performer on the 250 as it dropped 16.15 percent.
Assets managers had a hard time of it after Ashmore Group (LSE: ASHM) said that the assets under its management were down 10.5 percent in the quarter ending 30 September, with Man Group (LSE: EMG) down 4.03 percent while Ashmore dropped 4.04 percent and F&C Asset Management (LSE: FCAM) was 6.15 percent lower.
Miners were lower after metals prices declined on the news regarding exports from China, with Aquarius Platinum (LSE: AQP) down 7.17 percent to lead the sector lower, while Antofagasta (LSE: ANTO) dropped 6.34 percent and Kazakymys (LSE: KAZ) was 5.74 percent lower, although trader Glencore International (LSE: GLEN) added 2.41 percent as the best performer of three gainers in the sector.
Restaurants and pubs operator Mitchells and Butlers (LSE: MAB) dropped 6.89 percent for the worst performance in a mixed travel and leisure sector after Piedmont Inc, which already owns 23 percent of MAB’s All Bar One chain, said it won’t go forward with an offer for the company.
The FTSE Eurofirst 300 was down 1.27 percent to 964.58 while the IBEX was 0.92 percent lower to 8,943.5 and the Dax and the CAC-40 each dropped 1.33 percent, to 5,914.84 and 3,186.94 respectively.
Markets in Asia and the Pacific region were mostly higher on optimism that leaders in Europe are close to a plan to handle the debt crisis there, and after the US Federal Reserve said in the minutes of its most recent meeting that it is still thinking about further asset purchases to help the US economy.
The Nikkei 225 was up 0.97 percent to 8,823.25 in Tokyo, while the Topix index added 0.72 percent to 758.83 and the Mothers market gained 0.67 percent to 412.09, with factory equipment makers up on new data showing that machine tool orders were up 20 percent in September compared to the same month last year.
Industrial robot manufacturer Fanuc (TYO: 6954) was up 3.4 percent while Tsudakoma Corp (TYO: 6217), which makes machines to manufacture textiles, added 6 percent and lathe-maker Tsugami Corp (TYO: 6101) gained 9.9 percent.
Semiconductor-related shares saw gains on positive news from European chip-making equipment manufacturer ASML Holding (Euronext: ASML) issued a positive quarterly report and said that it expects more orders in the fourth quarter, with Tokyo Electron (TYO: 8035) up 1.4 percent while wafer-maker SUMCO Corp (TYO: 3456) added 1.9 percent, Elpida Memory (TYO: 6665) was 4 percent higher and Advantest (TYO: 6857) gained 5.6 percent.
Other gainers in the region included Taiwan’s Taiex, which was up 0.62 percent to 7,428.33, while the Kospi added 0.75 percent to 1,823.1 in South Korea, the Shanghai Composite gained 0.78 percent to 2,438.79, Australia’s markets were up as the Sydney Ordinaries added 0.93 percent to 4,306 and the S&P/ASX200 was up 0.96 percent to 4,244.5, and Hong Kong’s Hang Seng was 2.34 percent higher to 18,757.8.
The Straits Times Index was 0.14 percent lower to 2,733.97 in Singapore, while India’s Sensex dropped 0.44 percent to 16,883.9.
New York equities markets were lower at just past 12:30 p.m. local time, with the Dow Jones Industrial Average down 1.07 percent to 11,395.3 while the S&P 500 had dropped 1.23 percent to 1,192.42 and the Nasdaq Composite was 0.34 percent lower to 2,595.85.
Crude oil prices were lower after the US Energy Information Administration said that crude oil stockpiles in the US were up by 1.3 million barrels last week against an expected decline, although gasoline and distillates in storage dropped by 4.1 million barrels and 2.9 million barrels respectively.
November contracts for West Texas Intermediate crude was down $1.55 to $84.02 per barrel in midday trade on the New York Mercantile Exchange, while the latest reports showed Brent crude down $1.06 to $110.30 per barrel on the ICE Futures Europe exchange in London.
Metals prices were also lower at midday in New York, with December gold down $18.90 to $1,663.70 per troy ounce while December silver was $1.13 lower to $31.66 per troy ounce and December copper had dropped 8 cents to $3.31 per pound.
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Be careful with them. Are you aware that Rolls Royce paid millions of Dollars a year in secret corruption and slush funds to help sell their aero engines to airlines that will be “advised” (or forced!) by those receiving the secret slush funds.
Just one example is that Tommy Suharto (son of the ex-Indonesian president) was given about 20 million dollars and a new blue Rolls Royce car by Rolls Royce (before he was jailed for murder!) to force the Indonesian airline Garuda to take the R-R Trent 700 engine on the A330 aircraft they were buying. They got a really bad commercial deal and the follow-on warranty and support was probably the worst any operator had ever had. When Tommy was jailed, Rolls then paid his millionaire friend, Soetikno about 1 million dollars a year! This was supported by the Rolls exec in Indonesia (Dr Mike Gray) because Mike was given “personal benefit” by Soetikno to keep the contract going. Mike even used RR staff to support the bar girl he was “knocking off” when his wife was away.
Dick Taylor. (ex Rolls-Royce Chief Service Rep)