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February 6, 2007

Most equities markets higher on session

Permalink: Most equities markets higher on session by Elaine Frei

Filed under: News
Most equities markets higher on session

Tokyo equities markets were higher on Tuesday, with the Nikkei 225 adding 0.4 percent to 17,406.86 and the Topix index gaining 0.9 percent to 1,732.42. Carmakers were higher, as were camera makers and tech stocks. Banks were lower on a sector downgrade from Goldman Sachs.

European markets were higher as well, with the FTSE Eurofirst 300 adding 0.3 percent to 1,543.04, another six-year high. Banks were higher on the session, while oil was lower after UK company BP’s quarterly results did not pass muster. In the medical services sector, dialysis provider Fresenius Medical Care gained on a proposal in the US to make private insurers pay for dialysis for a longer period before Medicare benefits begin.

In London, both the FTSE 100 and FTSE 250 saw gains. The 100 added 0.4 percent to 6,346.3, while the 250 was 0.6 percent higher to 11,479.4 and the FTSE All-Share index gained 0.5 percent to 3,290.67. The 250 and All-Share closed at all-time highs, while the 100 reached a six-year peak. Supermarkets were higher, with rumors circulating that a group from Qatar had bought a 1 percent stake in Sainsbury. BAE Systems gained on record requests for military spending in the proposed 2008 US budget.

The markets were mixed in New York at midday. The Dow Jones Industrial Average was 0.2 percent higher to 12,638.03, but the Nasdaq Composite had dropped 0.6 percent to 2,455.52 and the S&P 500 fell 0.2 percent to 1,443.95. The Nasdaq was hurt by declines for National Semiconductor as earnings news was in focus.

Crude oil prices were higher again ahead of Wednesday’s weekly report on US inventories from the Energy Information Administration, while heating oil was higher but natural gas prices remained steady. The EIA said that OPEC production was down by 600,000 barrels per day in the fourth quarter, half of what was promised, and that it expected the oil cartel to implement 300,000 barrels per day of its promised 500,000 barrels per day from the beginning of February. Meanwhile, base metals prices were mostly up, but aluminium ended flat on the session. Gold remained about $650 per troy ounce.

In currency markets, the yen made gains on the US dollar and the euro early in the day but ended up slightly lower against each. The dollar was slightly lower versus the euro, while sterling gained strength.

House prices higher near Olympic sites

Permalink: House prices higher near Olympic sites by Elaine Frei

Filed under: Property, News
House prices higher near Olympic sites

House prices in areas close to sites where the Olympic Games will take place have risen since the announcement that the Games will be held in London in 2012, according to Halifax Estate Agents. Three areas in east London have gone up by more than the London average of 15 percent, while all areas close to the site have gone up by at least £15,000 in the 15 months since London’s bid for the games was approved. Still, houses in eight of the fourteen postal districts near where the Games will be held have prices more than 25 percent lower than the London average.

Rises in house prices are not unusual for cities that host the Olympics. Prices in the four previous host cities rose by more than the national average increase, with Barcelona seeing the biggest rises. House prices in Barcelona were up 131 percent in the five years before the 1992 Olympics, compared to an increase of 83 percent in all of Spain during the period.

In London, Leytonstone has seen the biggest increase in house prices since the London games were announced, adding 23 percent, or £50,714, followed by Hackney, up 21 percent (£48,578) and Clapton, up 18 percent (£38,895). Prices in Bethnal Green are up 9 percent, while Forest Gate, Stratford, Walthamstow, and Shoreditch have each added 8 percent. House prices in Homerton are up by 7 percent. Among areas close to Olympic sites where house prices are still significantly lower than the London average are East Ham, with prices 37 percent lower than the London average, and Plaistow at 41 percent lower than average London house prices.

New pensions bill comes under criticism

Permalink: New pensions bill comes under criticism by Elaine Frei

Filed under: News

The Pensions Policy Institute (PPI) has released a paper that claims a bill currently making its way through parliament will reduce some of the complexities of the nation’s pension system but will not solve its problems. While inequalities between men and women are reduced, individuals would still have to save privately to make up for problems that remain.

Coming in for particular criticism is a proposed personal account. While the PPI praised a proposed personal account that would give many employees access to a low-cost savings plan that would include a contribution from the employer, it was critical of provisions that allow individuals to opt out of the system rather than making savings compulsory. The report also says that the system remains unnecessarily complex, made up of two state pensions, private pensions, and means testing.

The bill also reduces the number of years of employment needed to retire with a full state pension. The reduction allows full benefits at 30 years, rather than the current 39 years of employment for women and 44 years for men.

EU calls poultry import ../../../category/news/bans __8220.css;disproportionate” to risk

Permalink: EU calls poultry import ../../../category/news/bans __8220.css;disproportionate” to risk by Elaine Frei

Filed under: Economy, News
EU calls poultry import ../../../category/news/bans _quot.css;disproportionate" to risk

In the wake of a bird flu outbreak at a turkey farm in Suffolk, five nations have now banned imports of poultry from the UK. South Korea, Hong Kong, Japan and South Africa have halted all imports, while Russia has stopped most imports but still allows cooked meats to be imported. According to the British Poultry Council, exports make up about 10 percent of the industry’s earnings each year.

While the import bans will have some effect on the UK’s poultry industry, the five nations that halted imports have been characterized as minor markets. Between 75 percent and 80 percent of UK poultry exports are to other members of the European union. In accordance with EU rules, member countries have only prohibited the importation of poultry and poultry products from a restricted zone around the affected farm.

Meanwhile, the European Commission has said that the bans are “totally disproportionate” to the threat posed by the outbreak to humans. Additionally the UK’s environment secretary, David Miliband told members of Parliament that the outbreak represents only a “negligible” risk to humans and said that it was safe to eat poultry and eggs.

The cull of the 159,000 birds affected at the Suffolk farm was completed Monday night.

Insurer Aviva notches record sales

Permalink: Insurer Aviva notches record sales by Elaine Frei

Filed under: Insurance, News
Insurer Aviva notches record sales

Aviva, the UK’s largest insurer, released a report Tuesday showing record sales in the fourth quarter. Total sales, which included investment, were 22 percent higher at £31.1 million.

Life and pension sales drove the insurer’s business and were up 18 percent to £26.2 million. In the UK, life and pension sales under the Norwich Union brand, were 25 percent higher, to £11.5 million, keeping pace with its closest rivals.

Internationally, life and pension sales were 13 percent higher, to £14.7 million, better than the target of 10 percent. International sales, focused in Europe until the recent expansion into the US with the purchase of AmerUs, provides around half of the company’s profits. AmerUs sold £324 million in the six weeks following its acquisition by Aviva.

The bad news in the report came from France and the Netherlands/Belgium/Germany region. In France, sales grew by only 1 percent, while life and pensions sales fell by 14 percent in the Netherlands, Belgium and Germany.

Aviva’s business in France was hurt by reforms that favored banks with insurance divisions over insurers, while sales in the UK were aided by newly introduced rules that allow individuals to save more for their retirement.

February 5, 2007

UK, european markets higher on session

Permalink: UK, european markets higher on session by Elaine Frei

Filed under: News

Falling export stocks, hit by both a stronger yen and a less than exciting quarterly report from Nissan Motor sent the Tokyo equities markets lower on Monday. The Nikkei 225 dropped 1.1 percent to 17,344.80, while the Topix index was 1.5 percent lower to 1,716.28. The Nissan report send the rest of the auto sector lower, while the electronics sector also declined. Fast Retaling, on the other hand, was higher on a rise in same-store sales.

The FTSE Eurofirst 300 was higher, but just barely, adding only 0.7 points to close the session at 1,538.32 for a gain of 0.04 percent. The energy sector was lower on more mergers & acquisitions news and banks were hurt by profit-taking, while airlines were higher.

In London, the FTSE 100 added 0.1 percent to 6,317.9, helped out by oil and telecommunications shares. The FTSE 200 was also higher, gaining 0.6 percent to 11,406.5 on bids news in the house building sector. The oil sector also saw gains after an upgrade of BP by Goldman Sachs.

Wall Street was mixed in mid-afternoon trade, with the Dow Jones Industrial Average adding 0.1 percent to 12,666.63, boosted by Wal-Mart’s gain on better than expected sales in January. The Nasdaq Composite, however, dropped 0.2 percent to 2,471.86 and the S&P 500 was down 0.1 percent to 1,446.91. Trade was mostly driven by earnings reports and bids news.

Crude oil prices were up slightly, nearing a return to $60 per barrel, as cold weather continued in much of the United States and heating oil demand is expected to reach 20 percent above normal for the time of year. Heating oil and natural gas both also gained in price. Metals prices were mixed but mostly higher, with nickel being the main faller after gaining early in the session.

UK bird flu outbreak leads to Russian ban on imports

Permalink: UK bird flu outbreak leads to Russian ban on imports by Elaine Frei

Filed under: Economy, News

In the wake of confirmation that the outbreak of bird flu in a turkey flock in Suffolk is the H5N1 strain that has killed not only birds but humans in other parts of the world, poultry industry officials acknowledged that the result is “not good news” and Russia has announced that it will ban the importation from the UK of live birds, hatching eggs, and all poultry products including meat, as well as feed and equipment for keeping and killing birds beginning Tuesday. A security zone has been set up around the farm where birds have died from the flu and the Department for Environment, Food and Rural Affairs has begun the process of killing all 159,000 turkeys in the flock.

Despite the fact that this outbreak is more serious than one in April 2006 when the same strain of bird flu was found in a swan in Cellardyke, Fife, industry officials hope that public fears will be quelled. They are trying to emphasize that the risk to humans from the outbreak is small, but they are well aware that chicken sales declined by 60 percent in France and Italy last year after similar scares. After revelation of bird flu in the swan in April, UK chicken sales dropped by a few percent for a couple of months before returning to normal, according to a spokesman for the National Farmers Union who nevertheless acknowledged that this case is more serious.

In addition to the ban in imports from the UK by Russia, Dutch and French officials have outlined measures to prevent the spread of the flu. Dutch farmers, for example, have been told to keep their commercial poultry indoors. The current outbreak in Suffolk is the most widespread on a commercial poultry farm in Europe.

Experts warn on pensions opt-outs for cash

Permalink: Experts warn on pensions opt-outs for cash by Elaine Frei

Filed under: News

Pension experts are worried that too many companies are too readily offering their employees large cash incentives for them to quit their often deficit ridden employer-connected pension schemes and move into a personal pension plan, or to opt for a less generous pension. Often, members of such pension programs are often offered thousands of pounds in cash to exit pension funds that are in deficit so that the companies they work for can cut their liabilities. By taking the cash, the individual loses any right to a pension from their employer.

The problem is, many of those who take the cash don’t put it into a private pension account or invest it otherwise to provide for their retirement, but instead buy a new car or spend it on other high-ticket items. Experts are concerned that pension fund trustees who run pensions schemes are not making sure that their members are aware of the full consequences of taking cash to exit the scheme. They are also worried that by issuing guidelines on such pay-offs, the Pensions Regulator has in effect encouraged more companies to take that path.

Trade unions are also concerned, as they have received more inquiries from their members about what they should do when offered these cash incentives to quit their pension scheme. The unions have called for requirements that employers and pension fund trustees explore all other options before being able to offer cash payments to employees to induce them to exit the pensions schemes.

Calls for tighter lending rules after record insolvencies in 2006

Permalink: Calls for tighter lending rules after record insolvencies in 2006 by Elaine Frei

Filed under: Banking, News

A report released last week by the UK government’s Insolvency Service that said the number of people declaring personal insolvency in 2006 probably exceeded 100,000, a new annual record, has spurred the Financial Ombudsman Scheme, a financial watchdog group, to call for UK banks to implement more stringent rules for issuing credit cards and granting loans. The most recent data, from the third quarter of 2006, showed that insolvencies rose in that period by 55 percent over the same quarter in 2005, and includes both individuals who declared bankruptcy and those who took out Individual Voluntary Arrangements (IVAs) to pay back part of what they owe to creditors.

The call for more stringent rules comes after a report that less than 10 percent of those being offered a credit card were asked for proof of income before being offered a card. Half were asked to disclose their income, but only a small portion of those were required to provide bank records proving that they make what they said they do.

The Insolvency Service report blamed the rise on insolvencies not only on more personal debt, which has doubled since the beginning of the decade, but also on the fact that more people are aware that they can declare insolvency and the fact that doing so carries less of a social stigma than it once did. Another factor contributing to the rise in insolvencies was said to be easier access to IVAs, in which their credit report is damaged but does not carry the risk of the individual losing their home, as in a bankruptcy.

UK house prices up 10 percent in 2006

Permalink: UK house prices up 10 percent in 2006 by Elaine Frei

Filed under: Property, News

A new survey from the Royal Institution of Chartered Surveyeors’ that reviewed the state of European housing markets in 2006 says that UK housing prices rose at a faster pace during the year than did housing prices in other major European economies. The survey found that UK house prices were up by around 10 percent last year. Meanwhile, house prices in Germany did not grow at all. Prices were up by 4 percent in Italy and by around 7 percent in France.

On the other hand, house prices in some Scandinavian and Central and Eastern European nations grew at a much faster pace than did UK house prices. House prices in Sweden did not grow much faster than UK rates, at 11 percent, while the price of houses grew at a pace of 17 percent in Norway and were up by 22 percent in Denmark. The fastest pace of house price growth took place further east. House prices grew at a rate of nearly 20 percent in Bulgarian and Estonia, while Poland witnessed house prices grow by more than 30 percent.

The author of the report, Professor Michael Ball, said that the survey shows that fears of a price slowdown in the housing markets in high-value markets such as the UK seem to be misplaced.

February 2, 2007

Equities markets mostly higher; oil, nickel prices gain

Permalink: Equities markets mostly higher; oil, nickel prices gain by Elaine Frei

Filed under: News

The Nikkei 225 closed at a 10-month high Friday, adding 0.2 percent to 17,547.11, while the Topix index also gained 0.2 percent to 1,742.40 as several companies saw significant daily gains. Among those gains was a 13 percent rise by Nikko Cordial after an earnings restatement convinced some that it was working toward a new start after its recent accounting scandal. Dowa Mining also saw double digit gains on an upgraded earnings forecast as the end of its fiscal year approaches.

In Europe, the FTSE Eurofirst 300 ganed 1.6 percent on the week to close Friday’s session at 1,537.65. German energy company Eon saw big gains after the withdrawal of Gas Natural from the bidding for Endsea left Eon as the only contender for the Spanish power generator. The truck making and airlines sectors were also higher on the week.

The FTSE 100 was 0.4 percent higher on the day and up 1.3 percent over the week as it closed at 6,310.9 on Friday. The FTSE 250 was up 1.1 percent for the session and 2 percent for the week when it closed at an all-time high 11,343.3 at the end of Friday’s session. Grocers were up on continuing speculation that a private equity group will bid for J Sainsbury based on interest in the properties it owns. These rumors also helped other property-backed stocks. Volume was an active 4.2 billion shares traded on the day.

Mid-session in New York found the markets mixed on the day but higher on the week. The Dow Jones Industrial Average had lost 0.2 percent at noon to 12,646.20 but still 1.3 percent higher for the whole week. The Nasdaq Composite was 0.1 percent higher at mid-session at 2,470.93, a gain of 1.5 percent on the week, while the S&P 500 was even on the day so far but up 1.7 for the week at 1,445.75. The Russell 2000 index of mid-caps was 2.7 percent higher on the week at lunchtime, having breached the 800 level for the first time in its history. Earnings reports and mergers activity were both in the spotlight during the week.

Currency markets saw the US dollar and the yen both generally weaker during the day as the yen was faced with possible discussion at the G7 meeting coming up in Germany and the greenback dealt with fallout from the US Federal Reserve’s decision to keep interest rates on hold.

In commodities markets, crude oil saw slight gains on Friday. Over the week gains were stronger, with West Texas Intermediate crude up 3.7 percent in the five sessions. Among metals, copper and zinc both fell significantly on Friday, while nickel was up by $550 per tonne on Friday even though it lost nearly 2 percent during the week. Gold was lower on the day.

Ruling: banks must reveal clients’ offshore account details

Permalink: Ruling: banks must reveal clients’ offshore account details by Elaine Frei

Filed under: Banking, News

After a legal dispute, four UK banks will be forced to hand over the details of offshore bank accounts held by approximately 100,000 customers to Revenue & Customs so that unpaid taxes can be collected. The ruling does not extend to secret Swiss bank accounts and some other offshore jurisdictions, however. But the information on accounts held in offshore accounts in places such as the Channel Islands is expected to lead to the collection of up to £275 million in unpaid taxes. While it has been legal to put money into such offshore accounts since 1979, concealing the amount of interest earned in an effort to avoid paying taxes on it is against the law.

The banks involved in the ruling are believed to be HSBC, HBOS, Royal Bank of London and Lloyds TSB. However, none of the banks were willing to confirm that they were included in the ruling. While HSBC said that it was aware of the ruling, the other three banks refused any comment on the issue. A similar ruling was issued in regards to clients of Barclays last year. The special commissioner who decided in favor of Revenue & Customs in the present instance said that he had taken his decision because it was, in his view, the only way that investigators could access the information they need.

Revenue & Customs is expected to announce in the spring that it will offer reduced penalties for investors who come forward and report their interest earnings from the offshore accounts voluntarily. The plan, now expected to be announced in April, will likely offer a reduced penalty of around 10 percent of the maximum during a limited period of about six weeks, although account holders will still be liable for 20 years of unpaid tax and interest. They will then have four months to complete disclosure and pay any taxes owed.

Study: UK pension deficits hit new low

Permalink: Study: UK pension deficits hit new low by Elaine Frei

Filed under: News

According to a new study, Britain’s top companies cut their pension deficits by £8.2 billion in January, down to £31.8 billion. This is the lowest pensions deficit since records began in 2002. The previous low was reached in April 2006 when the deficit fell to £34.3 billion. At its highest it reached £90 billion, in March 2003. The study, by Watson Wyatt, credits most of the decrease to higher bond yields, up by 0.15 percent in January, as well as to gains in the equities markets.

Pension deficits are carried as debt in a company’s accounting, and often companies have to divert money into retirement plans for their employees to balance the books. In other cases, companies either convert to less expensive plans or shut their pension plans down completely.

Pension funds commonly purchase bonds to meet their liabilities, but when prices rise and yields fall the fund accures a deficit. But when prices fall and yields rise, as has happened recently, the deficit in the fund declines. The other place where pension funds typically put their money is into equities shares. When those shares perform well, as is currently the case, deficits in the funds are reduced.

Deficits are expected to decline further as the year progresses, according to the report.

Standard Life announces increased payouts for policyholders

Permalink: Standard Life announces increased payouts for policyholders by Elaine Frei

Filed under: Insurance, Property, News

UK life insurer Standard Life said on Thursday that stock market gains have made it possible to increase payouts on all types of policies this year. This was especially good news for mortgage endowment policy holders, which are expected to go up at a rate of 5.75 percent, per guidelines issued by the Financial Services Authority. Because Standard Life had a growth rate of 10.4 percent last year, shortfalls would be reduced.

Even with this development, however, up to 90 percent of those who hold mortgage endowment policies with the company are at risk of not being able to pay off their entire mortgage with proceeds from their policies. The other bad news was that Standard Life will not increase guarantees for their with-profit policy holders, saying that hiking bonuses would decrease its ability to fund growth. Instead, bonus rates will remain at last year’s level.

There was bad news for shareholders, as well, as Standard Life said that it would not extend the benefits of its surplus cash to them because when the company was first floated last summer, its with-profits fund was wholly-owned by members.

Besides mortgage endowment policy holders, there was also good news for holders of Standard Life pension plans. Payouts on pensions will be higher this year.

February 1, 2007

European, UK markets see significant gains

Permalink: European, UK markets see significant gains by Elaine Frei

Filed under: Economy, News

In Japan on Thursday, the Tokyo equities markets were higher despite another huge decline by scandal-beset Nikko Cordial. The Nikkei 225 was 0.8 percent higher to 17,519.50, while the Topix index added 1 percent to 1,738.58. The electronics sector was mixed, while carmaker Honda saw declines in an otherwise higher automobile manufacturing sector.

The FTSE Eurofirst 300 was also 1 percent higher on the session, 15.5 points higher to 1,530.13. Banks were higher, as was the pharmaceuticals sector. The oil sector was also higher, while engineering was lower after Atlas Copco’s profits report was disappointing.

In London, meanwhile, the FTSE 100 added 1.3 percent to 6,282.2 on strong finishes in several sectors, including oil and pharmaceuticals. The FTSE 250 was also up strongly, 1.1 percent higher to 11,221.5. Trade was strong, as 4 billion shares changed hands.

The New York markets were mixed in mid-afternoon trade. While the Dow Jones Industrial Average, the S&P 500, and the Russell 2000 index of small and mid-caps were all higher, the Nasdaq Composite had dropped 0.1 percent to 2,461.61. The Dow was 0.1 percent higher to 12,637.55, while the S&P had added 0.3 percent to 1,442.45 after going as high as 1,444.01 as trade began, and the Russell was up 0.5 percent to 804.57 after a record close on Wednesday. In earnings news, ExxonMobil reported that it notched the highest ever yearly profit in 2006 despite fourth quarter profits falling by 4 percent.

Crude oil prices were mixed during the day, while natural gas prices dropped substantially after US stockpiles were reported to be down less last week than had bee expected. In metals markets, gold was higher. Aluminium was higher as well, but most other base metals prices declined.

UK manufacturing grows in January

Permalink: UK manufacturing grows in January by Elaine Frei

Filed under: Economy, News

New data from the Chartered Institute of Purchasing Supply and the Royal Bank of Scotland, released Thursday, put its main index of manufacturing activity in January up from December, with the January figure at 52.8. December’s number, which was revised upward, was 52. Analysts had expected that the January figure would drop to 51.7.

Growth was evident all sectors, and orders were see to increase in both the domestic and foreign markets. Foreign orders were especially robust from China and India. There was also higher demand from the United States, although sterling strength was seen to be holding US business back to an extent.

CIPS/RBS also reported that employment in the manufacturing sector was up a bit in January after declines in November and December, despite a complaint from the British Chamber of Commerce that interest rate hikes had cost a loss of 8,000 manufacturing jobs in January.

With data on the services sector due on Monday, the news out of the manufacturing sector sent sterling higher versus the euro and the US dollar after analysts said that the unexpected growth makes it more likely that the Bank of England will raise interest rates again next month.

Royal London says new business up 10 percent in 2006

Permalink: Royal London says new business up 10 percent in 2006 by Elaine Frei

Filed under: Insurance, News

Royal London, the UK’s largest provider or mutual life and pensions coverage, said that it saw a 10 percent jump in new business in 2006. Single premium business was up to £491million from £469.1 million, while regular premium sales to individuals was lower, dropping from £186 million to £156 million last year. These results came in a year when demand has been strong generally.

Growth could have been higher, according to the company, but it is hesitant to pay high commissions for new business that it does not keep on the books long enough to turn a profit. It does not believe that new business that does not stay on the books for longer than four or five years is not a suitable business model because it is simply not profitable.

This is especially true, the company’s chief executive said, of the pensions market, which is very price-competitive. Because most pensions business is sold as a stakeholder product, if the buyer finds a better price and changes to a new plan with a new company, the company he or she is currently with must transfer the lump sum to the competitor without being able to deduct the cost of setting up and selling the pension. As it is, it can take 10 years or longer for a provider to replace the full cost of setting up a pension with the 1 percent management charge for Stakeholder Pensions.

ING Direct under fire for lagging rates

Permalink: ING Direct under fire for lagging rates by Elaine Frei

Filed under: Banking, News

ING Direct has been the target of criticism recently for not passing on recent interest rate hikes from the Bank of England on to the 1.1 million holders of its savings accounts. When it launched its much-advertised savings main savings account in 2003, it said that it was determined to keep it as the best account available. However, it has now admitted that the current rate on the account, at 4.75 percent, is not the best rate available - Landsbanki’s Icesave account currently pays 5.7 percent - while saying that it will not change the rate on that account.

Instead, the savings provider has created another savings account, available only on the internet and called Web Saver, and that the rate on that account will go from 5.25 percent to 5.65 percent. This new account is touted as being for those who wish to manage their savings online and is only available to existing ING Direct customers.

ING blamed its delay in addressing the issue on it being “a big call” for them, and that changing rates is a big decision when it is dedicated to paying all customers a good rate. However, at least one analyst said that ING will likely continue to face criticism for its delay in introducing a higher-yielding account and in keeping the original account at the same rate, given their statements at launch.

January 31, 2007

New York markets gain on Fed decision, other markets see declines

Permalink: New York markets gain on Fed decision, other markets see declines by Elaine Frei

Filed under: News

In Japan on Wednesday, the Nikkei 225 dropped 0.6 percent to 17,383.42, while the Topix index fell by the same percentage to 1,721.96 as some sectors were hit by profit-taking again. Shippers were also hurt by rising oil prices, while Nikko Cordial was hit by another setback connected to continuing accounting irregularities.

In Europe, the FTSE Eurofirst 300 was also lower, falling 0.5 percent to 1,514.65. Earnings and broker comments were key to the day. The steel sector was higher on consolidation hopes after the sale of Corus while Italian banks gained, also on merger news and broker comments.

London, too was lower on the session, with the FTSE 100 0.6 percent lower to 6,203.1 and the FTSE 250 down 0.3 percent to 11,100.3 as trade volumes picked up to more than 3.5 billion shares traded. Gainers on the day included miner Kazakhmys, on the possibility of stake building in the Eurasian National Resources Corporation. Corus also gained on the day on the news that it was being bought by Tata Steel.

New York markets bucked the trend and gained ground in mid-afternoon trade after the Federal Reserve decided to keep US interest rates at 5.25 percent for the time being. The Dow Jones Industrial Average was 0.7 percent higher to 12,607.67, while the Nasdaq Composite added 0.4 percent to 2,457.81 and the S&P 500 gained 0.4 percent to 1,435.04. The Dow was also helped by a better than anticipated quarterly report from Boeing. Time Warner and Eastman Kodak also issued positive reports.

In currency markets, the US dollar was lower versus the euro after the Fed’s decision, while sterling was also weaker. The Swiss franc made gains against both the greenback and the euro. The yen was also higher.

Oil prices rose early, fell right after the US Energy Information Administration issued its weekly inventories report, then were up again my mid-afternoon in New York. Crude oil and gasoline stockpiles were higher last week, but distillates were down on higher demand for heating oil as cold weather set in to the US Northeast and Midwest. Metals prices were also higher on the session.

UK civil servants strike over privatization, pay issues

Permalink: UK civil servants strike over privatization, pay issues by Elaine Frei

Filed under: Economy, News

Civil servants and state employees in the UK remained away from their jobs on Wednesday over concerns about wages, job cuts, and privatization of government services. The Public and Commercial Services Union said that public services are being disrupted over the Treasury’s determination to cut 100,000 civil service and public sector jobs. Public sector employees are also upset that Chancellor Gordon Brown is insisting that pay raises for public sector positions be limited to the Bank of England’s inflation target of 2 percent. The strike, scheduled for 24 hours, could be followed by further actions if its concerns are not addressed, the PCS has said.

The current action has halted the processing of tax returns on the day that they are due and have reportedly prevented the delivery of at least one batch of returns to Revenue & Customs offices, possibly causing those taxpayers to be fined £100 for missing the deadline. Benefits offices were closed, and court proceedings - including the trial of six alleged terrorists - were put on hold. Picket lines set up by the union were also expected to close museums and galleries, including the British Library and the National Gallery. Union members were also expected to picket government departments.

The union’s demands include an end to the government’s efficiency drive, an end to the privatization of public services, and pay raises for workers that at least meet retail price inflation.

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